EUR/GBP in 3-day highs near 0.8580 on GBP selling

The Sterling loses ground and pushes the cross to fresh tops.
Brexit negotiations in centre stage ahead of key vote.
Government in talks with DUP for support ahead of vote.

Pablo Piovano FXStreet

The now softer tone in the British Pound is lifting EUR/GBP to fresh 3-day highs in the 0.8575/80 band.

EUR/GBP focused on Brexit vote

The European cross is reverting Friday’s pullback and advances to the vicinity of the 0.8600 handle on the back of a renewed selling pressure hitting the Sterling.

In fact, GBP is deflating further today after Chancellor P.Hammond said earlier in the day that there won’t be any meaningful vote later in the week if the government cannot get support from the DUP and Tory MPs.

It is worth recalling that PM Theresa May called for a third meaningful vote on her plan to leave the European Union at some point this week (Wednesday?) following two defeats and after the House of Commons voted against a ‘no deal’ scenario and an extension of the Article 50 during last week.

In the UK calendar, it will be a busy week for the Sterling as the labour market report is due tomorrow, inflation figures on Wednesday, Retail Sales and the BoE meeting on Thursday and Public Sector financial figures on Friday.

What to look for around GBP

The Sterling is expected to remain under scrutiny this week in light of another meaningful vote on May’s UK-EU divorce plan. The House of Commons will likely vote on Wednesday although it appears to all be hinging on a potential agreement between the Government and the DUP.

EUR/GBP key levels

The cross is gaining 0.66% at 0.8569 and a breakout of 0.8580 (high Mar.18) would open the door to 0.8604 (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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