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  • The cross is adding to yesterday’s gains, targets 0.8600.
  • GBP remains under scrutiny ahead of crucial votes.
  • ECB meeting coming up next. Consensus sees no change in stance.

The better tone in the single currency is propping up another so far positive performance of EUR/GBP, which is now approaching the critical resistance at the 0.8600 milestone.

EUR/GBP focused on ECB event, Brexit news

The European cross is adding to yesterday’s gains amidst a cautious tone surrounding the shared currency ahead of the key ECB gathering. It is worth noting that market consensus sees the central bank refraining from acting on both rates and forward guidance.

On the Brexit side, there is no significant news around the recent talks between the UK and EU negotiators, where the Irish backstop remains the key issue ahead of next week’s crucial votes.

In the UK data space, house prices tracked by the Halifax index rose more than expected 5.9% MoM in February and 2.8% from a year earlier. On this side of the Channel, Employment Change in the euro bloc expanded 1.3% on a yearly basis in Q4, while EMU GDP figures showed the economy expanded 0.2% inter-quarter in the October-December period and 1.1% on a yearly basis.

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. In this regard, the probability of a second referendum has almost evaporated, while a ‘no deal’ outcome remains well on the table (particularly after recent comments by L.Fox) 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 0.12% at 0.8593 and a breakout of 0.8645 (high Mar.5) would expose 0.8676 (21-day SMA) and finally 0.8728 (high Feb.21). On the other hand, the next support is located 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).