EUR/GBP looks for direction near 0.8750

  • The cross alternate gains with losses in the mid-0.8700s.
  • UK PM May said the country will leave the EU on March 29.
  • ‘No deal’ scenario still ‘on the table’ as negotiations set to continue.

Decent gains in the Sterling are somewhat limiting the upside potential in EUR/GBP so far today, which met moderate resistance in the mid-0.8700s.

EUR/GBP supported near 0.8600

After three consecutive daily advances, the European cross has now returned to the negative territory against the backdrop of the current rebound in the demand for the British Pound.

In fact, GBP is trading on a better mood today, basically on the back of the persistent sell off in the buck following yesterday’s dovish tilt from the FOMC meeting.

Latest news on Brexit noted PM Theresa May has stressed the UK will leave the EU on March 29, all against a vacuum of headlines on the subject so far today.

In Euroland, the Italian economy is seen slipping back into recession in the October-December 2018 period, while the broader economy in the euro bloc is expected to have expanded 0.2% inter-quarter.

EUR/GBP key levels

The cross is now losing 0.06% at 0.8746 and a break below 0.88732 (10-day SMA) would open the door to 0.8655 (monthly low Nov.13 2018) and then 0.8617 (2019 low Jan.25). On the upside, the next resistance emerges at 0.8764 (high Jan.31) followed by 0.8839 (21-day SMA) and finally 0.8862 (high Jan.21).

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