EUR/GBP gets pounded, drops to 3-week lows near 0.8540

• EUR/GBP extends the weekly downside to 0.8540.
• Intense EUR sell-off weighs on the cross midweek.
• UK (still) PM B.Johnson could face another no-confidence vote.

Further weakness in the European currency now drags EUR/GBP to new 3-week lows in the 0.8540 region on Wednesday.

EUR/GBP looks to UK politics, EUR selling

EUR/GBP sheds ground for the third session in a row midweek, heavily influenced by the intense decline in the single currency in response to recession fears in the broader Euroland in combination with noticeable ECB inaction.

On the other side of the Channel, the sterling is expected to remain under scrutiny against the backdrop of mounting political effervescence, particularly exacerbated in response to several resignations from ministers of the government in the last hours and a most likely no-confidence vote against Boris Johnson as soon as tonight.

EUR/GBP key levels

The cross is losing 0.43% at 0.8547 and a breach of 0.8511 (low June 16) would expose 0.8485 (low June 9) and finally 0.8441 (200-day SMA). On the other hand, the next up barrier emerges at 0.8678 (monthly high July 1) followed by 0.8721 (2022 high June 15) and then 0.9085 (2021 high January 6).