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  • EUR/GBP briefly dips below 0.8600, recovers afterwards.
  • All eyes on the 2-day EU Summit kicking on Thursday.
  • An extension of Article 50 looks likely in the next days.

The buying pressure around the Sterling has briefly pushed EUR/GBP below the 0.8600 handle to clinch fresh 5-month lows earlier in the session.

EUR/GBP hurt by GBP-buying, focused on Brexit

The European cross has resumed the (sharp) downside on Wednesday, down in four sessions out of the last five ones and losing ground for the third week/month in a row so far.

Auspicious headlines from the Brexit front have been supporting the impressive rally in the Sterling in past sessions, forcing the cross to recede further and break below the 78.6% Fibo retracement of the May-August rally (0.8667).

Latest news has cited the possibility that UK PM B.Johnson could request an extension of the Article 50 to January 31 2020 as early as on Saturday if a deal is not secured before. In this regard, all the attention will be on the critical EU Summit on Thursday and Friday, where Brexit will be on top of the agenda.

EUR/GBP key levels

The cross is losing 0.12% at 0.8617 and a drop below 0.8597 (monthly low Oct.16) would expose 0.8488 (monthly low May 6) and then 0.8474 (2019 low Mar.12). On the other hand, the next resistance aligns at 0.8807 (61.8% Fibo of the May-August rally) followed by 0.8822 (200-day SMA) and finally 0.8906 (50% Fibo of the May-August rally).