EUR/GBP bounces of 0.8890, 55-day SMA

• EUR/GBP adds to yesterday’s gains near 0.8950.
• EU has rejected B.Johnson’s view on Brexit policy.
• ECB revised down its inflation, growth projections.

EUR/GBP is posting marginal gains in the mid-0.8900s, managing to rebound from yesterday’s lows in the 0.8980 region, coincident with the 55-day SMA.

EUR/GBP supported just below 0.8900

The European cross left behind the negative start of the week in response to the better mood around the Sterling after Boris Johnson was elected new UK Prime Minister.

In addition, persistent weakness around the single currency on poor data and dovish ECB also brought in some selling mood around the cross and accompanied the move lower.

However, the British Pound has come under selling pressure once again in past hours after fresh frictions emerged between Brussels and Johnson’s Brexit plan, which includes getting rid of the Irish backstop.

Data wise today in Euroland, the ECB published its Survey of Professional Forecasters. The central bank revised lower its projections for inflation and economic activity, leaving unchanged its views on the unemployment.

EUR/GBP key levels

The cross is gaining 0.09% at 0.8956 and a breach of 0.8891 (monthly low Jul.25) would open the door to 0.8872 (low Jun.20) and then 0.8793 (200-day SMA). On the upside, the next barrier aligns at 0.8971 (21-day SMA) seconded by 0.9005 (high Jul.23) and finally 0.9051 (2019 high Jul.17).