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  • The cross met resistance in the 10-day SMA around 0.8620.
  • UK, EU officials to meet later on Irish backstop.
  • UK Parliament will vote on March 12 on May’s deal.

The sterling manages to pick up some pace in the wake of the release of the Services PMI and is now forcing EUR/GBP to drop and test daily lows in the 0.8590/85 band.

EUR/GBP weaker on data, looks to Brexit

The European cross met a bout of selling pressure after UK Services PMI surprised markets to the upside, coming in at 51.3 (vs. 49.9 forecasted) for the month of February.

Other than data, the British Pound has eased some ground from recent YTD tops beyond 1.3300 the figure, as market participants seem to be taking a cautious stance ahead of the crucial votes expected next week.

Later in the day, UK will meet EU officials in Brussels with the Irish backstop issue on top of the agenda.

What to look for around GBP

The British Pound is expected to remain under the microscope in the next weeks in light of key votes in March 12/13/14. Following recent news, the probability of a second referendum has almost evaporated, while a ‘no deal’ cannot be ruled out and an extension of Article 50 emerges as the most likely scenario in the next months. On the broader picture, PM May made clear her intentions to remain in office to deal with the domestic agenda in the next months, opening at the same time another potential source of political uncertainty.

EUR/GBP key levels

The cross is losing 0.17% at 0.8587 facing the next support at 0.8528 (2019 low Feb.27) followed by 0.8402 (monthly low Feb.22 2017) and then 0.8382 (monthly low May 10 2017). On the other hand, a breakout of 0.8622 (high Mar.1) would expose 0.8696 (21-day SMA) and finally 0.8728 (high Feb.21).