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MNI (London)
EURO-STERLING: Foreign Secretary Johnson's resignation Monday prompted strong
sterling sell pressure which spiked EUR/GBP to a high of Gbp0.8902. However,
once the dust settled the cross eased back to Gbp0.8855 during the NY afternoon
before it closed the day at Gbp0.8865. Further recovery proved slow in Asia, the
rate edging on to Gbp0.8875 but level remains under pressure into early Europe.
Next resistance noted between Gbp0.8879/84 (50%-61.8% Gbp0.8902-0.8855), a break
to expose that Monday high of Gbp0.8902. Topside of the 1.0% envelope, drawn
around the 10-dma, has now moved up to Gbp0.8931. Support remains at
Gbp0.8855/50 ahead of Gbp0.8820/10. The 10-dma currently comes through at
Gbp0.8842. Market watching for developments ie will Brexiteers in PM May's party
garner enough supporters to prompt a vote of no confidence, and more to the
point what chance they would win. To some May has now removed her main Brexit
opposition from the Cabinet and the way could be open to a soft Brexit which
would be sterling supportive. PM May has the look of Michael Collins in Ireland,
managing to get some plan together to progress Brexit but hated by some in her
party for not going the hard exit route.  
MNI London Bureau | +44 203-586-2231 |
MNI London Bureau | +44 203-586-2231 |

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