Search ForexCrunch
  • The cross tumbled further and recorded new lows near 0.8470.
  • Optimism on a Brexit deal gives extra legs to the Sterling.
  • House of Commons will vote later today on May’s plan.

The persistent buying pressure around the British Pound is forcing EUR/GBP to give away further ground and drop to the 0.8475/70 band, levels last seen in mid-May.

EUR/GBP focused on today’s vote

After bottoming out near the 0.8470 region earlier in the session, the European cross found some buyers and managed to regain the critical barrier at 0.8500 the figure and beyond.

All eyes will be upon the crucial Brexit vote later today at the House of Commons, where PM Theresa May will try once again to impose her plan for the UK-EU divorce. Latest news said May appears to have secured some ‘legally binding’ amendments in her deal.

It is worth recalling that if this meaningful vote is rejected today, there will be another vote tomorrow on a motion for a ‘no deal’, which in case of another fail will give way to another key vote on Thursday on the probable extension of Article 50.

What to look for around GBP

The Sterling is expected to remain under the microscope in the next hours in light of the crucial vote later today (and probably on Wednesday and Thursday). In this regard, PM May said some last-minute progress has been made between the UK and EU officials, although the opposition party has talked down the fact. On another front, PM Theresa May made clear her intentions to remain in office to deal with the domestic agenda in the next months (say after Brexit), opening at the same time another potential source of political uncertainty.

EUR/GBP key levels

The cross is retreating 0.11% at 0.8538 and a breakdown of 0.8474 (2019 low Mar.12) would expose 0.8402 (monthly low Feb.22 2017) and then 0.8382 (monthly low May 10 2017). On the upside, the next barrier aligns at 0.8575 (10-day SMA) followed by 0.8648 (21-day SMA) and finally 0.8675 (high Mar.11).