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EUR/GBP dropped on some optimism related to Brexit. What’s next? Can the Brexit cross continue lower?

Here is their view, courtesy of eFXdata:

Danske Research discusses EUR/GBP outlook in light of the latest Brexit development.

“EUR/GBP currently trades in the low end of the 0.86-0.89 range at 0.865 and a further decline in the ‘no deal’ Brexit risk could lead to further GBP appreciation and  possibly a test of 0.86 short term,” Danske notes.

However,  we would need to see a more ground breaking development either in the form of an agreement of a long extension of Article 50 or the call for a second referendum to justify a sustained break below 0.86 at this stage. Especially the latter would be very positive for GBP as a ‘no Brexit’ scenario (likely after a second referendum) could send EUR/GBP sub 0.80,” Danske adds.

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