EUR/GBP on the defensive, traders await Carles Puigdemont's statement

Currently, EUR/GBP is trading at 0.8933, up 0.00% on the day, having posted a daily high at 0.8957 and low at 0.8925.

Having ranged between 0.8931/0.8947 in Asia, EUR/GBP picked up a slight bid in Europe with Hawkish ECB comments of late and solid EZ data that has offset Catalan political uncertainty. However, the EUR dipped on unexpectedly soft French IP which fell 0.3% vs +0.4% f/c. Also to note that the fifth round of Brexit talks continues today ahead of the EU summit next week.

As far as sterling, cable rose to a high of 1.3203 on better than expected UK output data with Aug construction output +0.6% vs flat f/c. Mfg output +0.4% vs +0.2% f/c and annualized industrial output +1.6% vs +0.8% f/c.

Catalonia's Puigdemont's statement delayed to 17:00 GMT

Eyes are on Puigdemont's statement that is due within the hour. Carles Puigdemont is to reveal his plans for Catalan independence and it will be the first time he addresses the regional parliament since the referendum that provoked the standoff with the Spanish government.

ECB expectations?

In respect to the recent hawkishness from ECB officials this week, analysts at Brown Brothers Harriman explained that with the highest confidence, they can say that the ECB's purchases will not stop cold at the end of the year.  

"They will continue, even as the Fed's balance sheet begins to shrink.  The main focus is on the trade-off between the length of the program (duration) and the size (of the monthly purchases.  Our insight that policymakers see this as a trade-off has now been underscored by the ECB's chief economist.  There is increased talk of a large cut in monthly purchases and extending the program well into next year (more than six months)," the analysts explained.   

EUR/GBP levels

Analysts at Commerzbank noted that EUR/GBP has stalled just ahead of the 55-day ma at 0.9014, with the base of the cloud at 0.9025 and the 50% retracement at 0.9027:

"We suspect that the market will fail here. Directly below the market lies a major band of support which extends down from the 0.8748 14th July low to 0.8720 – this contains the 200 day ma, the 55 week ma, and the 2015-2017 uptrend. Below 0.8700 would target the 0.8530/78.6% retracement of the move seen this year," the analyst argued.