EUR/GBP consolidates important gains, head for the highest close since August
- Euro holds to gains against Pound on the back of Brexit developments.
- UK May postponed the Parliamentary vote, will return to Brussels.
The EUR/GBP pair rose sharply for the second-day in-a-row, accumulating a gain of more than 150 pips. Today the pair peaked at 0.9086 and then pulled back, finding support at 0.9035/40.
The pair continues to receive support from Brexit and UK political uncertainty. Today Prime Minister May postponed the parliamentary vote on the Brexit deal and will go back to Brussels looking for concessions on the Irish backstop. “With limited scope for renegotiation, finding a solution that gains Parliamentary approval will remain challenging. This makes for a more volatile period for the economy and markets”, said ING analysts. The last headline, came from EU Donald Tusk saying that the bloc won't renegotiate the deal with UK and called from a Brexit summit for Thursday.
Regarding the euro, the situation in France is a source of concerns that could affect the pair, limiting the upside.
EUR/GBP Levels to watch
The euro is headed toward the highest close since August and is pointing to the 2018 highs seen back in August slightly below 0.9100. To the upside, the immediate resistance is seen at 0.9050, followed by 0.9095 (August high) and 0.9140. On the downside, support could be located at 0.8995 (Sep 21 high), 0.8945 (Dec 4 high) and 0.8885.