EUR/GBP breaks below the 100-day SMA to fresh lows near 0.8550

The better tone in GBP drags the cross lower to the mid-0.8500s.
Positive headlines around Brexit help the Sterling.
May’s plan could be backed by some Labour MPs.

Pablo Piovano FXStreet

The now better mood around the British Pound is dragging EUR/GBP to test fresh lows in the mid-0.8500s, although rebounding soon afterwards.

EUR/GBP offered on Brexit headlines

The European cross picked up extra downside pressure today in response to positive headlines from the Brexit front. In fact, news hit the wires that some labour MPs could support PM May’s Brexit plan at today’s vote, although it is still not clear if that would be enough to see her motion passing the House of Commons.

Moving forward, all the attention will be on the House of Commons once again, as MPs will vote only on the withdrawal agreement at 1430 GMT.

Earlier in the session UK GDP figures noted the economy expanded 0.2% inter-quarter during the October-December period and 1.4% on an annualized basis. Additional UK data saw Business Investment contracting 0.9% QoQ during the same period, bettering expectations.

On this side of the Channel, German Retail Sales came in above forecasts during February, the jobless rate inched lower to 4.9% despite the unemployment decreased less than expected.

EUR/GBP key levels

The cross is retreating 0.35% at 0.8571 and a breach of 0.8483 (low Mar.27) would expose 0.8471 (2019 low Mar.13) and then 0.8402 (monthly low Feb.22 2017). On the other hand, the next up barrier aligns at 0.8629 (high Mar.29) seconded by 0.8674 (55-day SMA) and finally 0.8722 (high Mar.22).

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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