EUR/GBP bounces off lows, regains 0.8500 and above

The cross moves higher on GBP correction lower.
‘No deal’ failed by a narrow margin on Wednesday.
House of Commons will vote today on extension of Article 50.

Pablo Piovano FXStreet

The now offered bias around the British Pound is helping EUR/GBP to gather some composure and return to levels above the critical barrier at 0.8500 the figure.

EUR/GBP looks to Brexit vote

The European cross is attempting a rebound beyond the 0.8500 milestone following yesterday’s sharp pullback to fresh lows in the 0.8470 region, area last visited in mid-may 2017.

The down move in the cross has been on the back of a strong pick up in the sentiment surrounding the Sterling after the ‘no deal’ vote was rejected at the House of Commons albeit by just 4 votes and in response to subsequent rumours that ‘hard Brexiteers’ could now support May’s alternative plan to leave the EU.

Later today, GBP is expected to remain in centre stage, as the House of Commons will vote on an extension of Article 50. The broad consensus sees the motion to pass by ample margin, which should allow negotiators to buy extra time to eventually clinch a deal (or not).

EUR/GBP key levels

The cross is gaining 0.42% at 0.8523 and a breakout of 0.8573 (10-day SMA) would open the door to 0.8627 (21-day SMA) and finally 0.8675 (high Mar.11). On the flip side, the next support lines up at 0.8471 (2019 low Mar.13) seconded by 0.8402 (monthly low Feb.22 2017) and then 0.8382 (monthly low May 10 2017).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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