- The cross advances further and tests the 0.8600 area.
- PM Theresa May’s government faces critical hours.
- UK Parliament looks to take control of Brexit negotiations.
The Sterling came under further downside pressure at the beginning of the week and has lifted EUR/GBP to fresh tops in the 0.8600 neighbourhood.
EUR/GBP looks to Brexit, UK government
The European cross is partially reversing Friday’s sharp pullback, although the bullish attempt appears to have met a tough resistance around the 0.8600 milestone.
Crucial days for the British Pound lies ahead, as a third meaningful vote on PM May’s plan to leave the UK (MV3) is expected later in the week (Tuesday?). However, the focus of attention has now shifted to the increasing political effervescence surrounding May’s government and intentions of the Parliament to take over Brexit negotiations.
In the meantime, PM May will meet with her Cabinet later today prior to a discuss of her recent trip to Brussels at the House of Commons. Furthermore, Wednesday could be a key day as the House of Commons is expected to vote on a series of ‘indicative votes’ put forward by MPs O.Letwin, D.Grieve and H.Benn which aim to take over the negotiations. A progress of this motion carries the potential to open the door for PM May to step down.
What to look for around GBP
Upcoming discussions at the House of Commons will be key for the performance in the Sterling and the Brexit negotiations, including the palpable possibility that Theresa May could resign as Prime Minister. A third meaningful vote (MV3) is expected at some point later in the week, while May continues to seek support for her plan among MPs.
EUR/GBP key levels
The cross is gaining 0.29% at 0.8577 facing the next hurdle at 0.8706 (55-day SMA) seconded by 0.8722 (high Mar.22) and finally 0.8839 (200-day SMA). On the flip side, the breach of 0.8532 (low Mar.22) would expose 0.8471 (2019 low Mar.13) and then 0.8402 (monthly low Feb.22 2017).