EUR/GBP: Bulls cheer another Brexit disarray around 0.8580

The EUR/GBP pair is taking the bids around 0.8580 on early Tuesday. The quote rallied more than 50 pips to the high near 0.8600 after the UK’s House of Commons rejected all four Brexit options available for today’s indicative voting. EUR/GBP dropped on Monday as sluggish data from the EU and news report of the dovish comments by the ECB President Mario Draghi weakened the Euro while the British Pound (GBP) was stronger against the majority of its counterparts as markets expected a solution to the Brexit problem from today’s voting result.

The British members of parliament (MPs) backed none of the four Brexit proposals up for voting, as the result of ballot count says. The UK House of Commons again failed to deliver any meaningful direction to the Brexit problem that the economy is struggling with.

After the results, The Guardian reported that the European parliament's lead Brexit spokesman says no-deal Brexit is 'nearly inevitable'. Though, the British parliament expects to avoid such a scenario by voting on PM May’s deal again during the week.

On Monday, not only weaker than expected print of the Eurozone consumer price index (CPI) flash estimate but final readings of purchasing managers’ indices were also a disappointment for the regional currency. ANZ reported that the European Central Bank (ECB) Vice President Luis de Guindos noted the weaker growth is leaving its mark on domestic price pressure whereas the ECB President Mario Draghi also noted in the forward to the central bank's annual report that substantial stimulus is still needed to bolster inflation.

Looking forward, comments from the ECB’s Chief Economist Peter Praet and the UK Markit construction purchasing managers’ index (PMI) could offer near-term direction to the EUR/GBP pair.

While Praet is less likely to deviate from recent dovish signals by the Eurozone authorities considering sluggish data-points, likely improvement in the UK construction PMI to 49.8 from 49.5 could add further weakness into the pair. However, any political disappointment adding further complexity into the Brexit could weigh on the GBP.

EUR/GBP Technical Analysis

While 50-day simple moving average (SMA) can continue to restrict near-term upside at 0.8650, buyers may also find it hard to clear 0.8730 during the further rise.

Alternatively, 0.8500 and 0.8470 can keep the pair guarded on the downside.