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  • The cross reverts Tuesday’s drop and advances above 0.8600.
  • GBP remains on the defensive on Brexit woes.
  • UK Trade Secretary L.Fox said he could vote for a ‘no deal’ next week.

The negative tone remains intact around the Sterling this week and is now helping EUR/GBP to reclaim the key up barrier at 0.8600 the figure.

EUR/GBP focused on Brexit votes

The European cross is prolonging the choppy trade so far this week, always in tandem with the alternating price action surrounding the British Pound.

In fact, GBP remains under pressure after UK Trade Secretary L.Fox said earlier in the day that he could favour a ‘no deal’ scenario at next week’s vote. It is worth recalling that a meaningful vote on May’s plan to leave the EU is due on March 12. If rejected, the House of Commons will vote the following day on a ‘no deal’ option.

In today’s docket, BoE’s MPC Jon Cunliffe will speak on ‘The Next Great Crisis’ in London, seconded by the speech by MPC Michael Saunders at the Imperial College Business School, also in London.

On this side of the Channel, the next key event will be tomorrow’s ECB meeting, where consensus ruled out any move on rates.

What to look for around GBP

The British Pound is expected to remain under the microscope in the next days in light of crucial votes in March 12/13/14. Following recent news, the probability of a second referendum has almost evaporated, while a ‘no deal’ outcome remains well on the table (particularly after Fox’s comments) and an extension of Article 50 still has chances. 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 gaining 0.31% at 0.8605 and a breakout of 0.8645 (high Mar.5) would expose 0.8686 (21-day SMA) and finally 0.8728 (high Feb.21). On the other hand, the next down barrier emerges 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).