- EUR/GBP stays sidelined above the 0.8600 handle so far.
- Attention is now on the UK Parliament vote tomorrow.
- The DUP still rejects the recent Brexit deal.
EUR/GBP manages to recover the smile so far on Friday, regaining the 0.8600 handle and above after Thursday’s brief test of the 0.8570 region, or new 5-month lows.
EUR/GBP now looks to UK Parliament
The bearish note around the European cross remains well and sound at the end of the week. Indeed, the cross has almost fully retraced the sharp up move seen in May-August, where it rebounded from sub-0.8500 levels to as high as the 0.9320 region.
The continuation of the up move in the single currency in combination with some cautious tone from the Sterling is somewhat bolstering the rebound in the cross from recent lows.
Following the Brexit deal on Thursday, the UK Parliament is now in centre stage as it is expected to discuss the agreement tomorrow. Market consensus is seeing a close call and opinions regarding the potential results stay pretty divided. Adding to the ongoing cautiousness, it is worth nothing that the DUP still opposes the Brexit deal as it stands now.
EUR/GBP key levels
The cross is up 0.05% at 0.8629 and faces the next resistance at 0.8667 (78.6% Fibo of the May-August rally) followed by 0.8818 (200-day SMA) and finally 0.8906 (50% Fibo of the May-August rally). On the other hand, a drop below 0.8574 (monthly low Oct.17) would expose 0.8488 (monthly low May 6) and then 0.8474 (2019 low Mar.12).
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