EUR/GBP holds onto daily gains around 0.8700 as pound slides across the board

• Pound among worst performers on Tuesday.
• Bank of England denies it will delay gilts sales.  
• EUR/GBP bullish, finds resistance at 0.9730.

The EUR/GBP is rising on Tuesday on the back of a weaker pound, hit by the ongoing political and fiscal drama in the UK. The cross peaked at 0.8731, the highest level since last Thursday and then pulled back toward 0.8700.

UK drama weighs on GBP

The pound is among the worst performers on Tuesday hit by the ongoing political crisis in the United Kingdom. Gilts tumbled after the Bank of England dismissed an Financial Times report that it could delay the sale of bonds, scheduled for October 31. That same day, the government will announce more fiscal plans. With all that is going on, there is a long time until that date and the UK could even have a new PM by then.

Inflation figures are due in the UK on Wednesday and also the final reading of Eurozone September inflation numbers.

Regarding the energy crisis, the European Commission is proposing member countries to buy gas collectively. It also proposed a cap on excessive and volatile gas prices.

EUR/GBP up but unable to break 0.8730

The EUR/GBP is moving with a bullish bias in the very short-term. The upside found resistance at 0.8730.  A break higher would open the doors for a recovery above 0.8800. The next crucial area is seen at 0.8810 with a break higher, strengthening the outlook for the euro.

A slide below 0.8660 would be positive for the pound, exposing the 0.8600/10 area. A daily close below should open the doors to more losses in the short-term.

Technical levels