- The cross struggles around the 0.8530 area.
- House of Commons voted to extend Article 50 on Thursday.
- Another meaningful vote expected next week.
The lack of direction around the Sterling is governing the sentiment in EUR/GBP, which managed to gather some traction following YTD lows in the 0.8470 region (Wednesday).
EUR/GBP volatile after Brexit vote
The British Pound is alternating gains with losses today after investors continue to adjust to yesterday’s vote at the House of Commons on the extension of Article 50.
In this regard, it is worth mentioning that an extension of Article 50 needs a unanimous vote from all EU members.
GBP will remain in centre stage of course, as PM Theresa May has now called for another meaningful vote on her plan to leave the European Union on Wednesday. If her plan passes the vote, May could ask the EU for an extension to end of June, or longer if her plan is rejected (once again).
What to look for around GBP
The Sterling is expected to remain under the microscope in the next days following this week’s votes. In fact, a new meaningful vote is likely on Wednesday, while negotiations between PM May and MPs and between UK and EU officials are also expected to intensify. Further bouts of volatility are therefore on the cards for GBP, opening the door to a potential break of recent tops in the mid-0.8600s as well as YTD lows in the 0.8470 area seen earlier in the week.
EUR/GBP key levels
The cross is losing 0.06% at 0.8530 and a breakout of 0.8574 (high Mar.15) would open the door to 0.8613 (21-day SMA) and finally 0.8675 (high Mar.11). On the flip side, the next support lines up at 0.8471 (2019 low Mar.13) seconded by 0.8402 (monthly low Feb.22 2017) and then 0.8382 (monthly low May 10 2017).