- The cross struggles for direction near 0.8770 today.
- GBP remains under pressure on Brexit uncertainty.
- PM May will give a statement on Brexit later today.
The sentiment around the Sterling remains negative so far this week, prompting EUR/GBP to trade within a tight range below the 0.8800 handle.
EUR/GBP looks to Brexit… what else?
The European cross is looking to extend yesterday’s gains, coming up from last week’s lows in the 0.8730/25 band and re-shifting its focus to the key barrier at 0.8800 the figure.
In the meantime, the British Pound remains under pressure amidst the absence of further significant progress in the UK-EU negotiations. In this regard, Brexiter Andrea Leadsom said earlier in the day that PM May could put a new deal to a vote in the House of Commons anytime soon.
It is worth mentioning that GBP has derived further downside pressure as of late in response to weaker-than-expected results from UK fundamentals.
What to look for around GBP
The British Pound is expected to remain under increasing pressure as we get closer to the March 29 deadline and there is still not a hint of a solution to the EU-UK divorce, where the Irish backstop stays in centre stage and a ‘hard Brexit’ scenario is not totally ruled out. Extra weakness around GBP also comes from deteriorated fundamentals in the UK and following the recent BoE event, where the central bank cut its growth forecasts, while investors remain highly skeptical on a probable rate hike by the ‘Old Lady’ in the next months.
EUR/GBP key levels
The cross is now gaining 0.05% at 0.8774 facing the next hurdle at 0.8821 (high Feb.5) followed by 0.8860 (200-day SMA) and finally 0.8886 (55-day SMA). On the flip side, a break below 0.88732 (10-day SMA) would open the door to 0.8728 (low Feb.7) seconded by 0.8655 (monthly low Nov.13 2018) and then 0.8617 (2019 low Jan.25).
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