EUR/GBP upside faded hard into year end ahead of meaningful vote
- EUR/GBP has been sliding as sterling picks up a bid following short-covering flows on the news of the UK parliament members claiming a ”meaningful vote” to be able to veto post-Brexit trade deals which boosted Sterling to the upper boundary of the sideways range of 1.2600-1.2700.
- EUR/GBP is currently trading at 0.8946 from a high of 0.9022, up from a low of 0.8926.
EUR/GBP has been correcting the November rally and has fallen to the 38.2% Fibo and the 4hr 200 SMA.
As ever, Brexit headlines have been conflicting with respect to sentiment, causing some volatility for the pound. We have had the headline that the odds of Britain leaving the European Union are "50-50" if parliament rejectsTheresa May's Brexit deal, Liam Fox warned, the International Trade Secretary.
Fox said that the only way to be "100 per cent certain" that Britain will leave the EU is if MPs vote for the Prime Minister's withdraw agreement. However, today's headline boosted the pound whereby UK parliament members were claiming a ”meaningful vote” to be able to veto post-Brexit trade deals.
Market gets set for the meaningfull vote
The UK is due to leave the EU on 29 March, following the result of the 2016 referendum. Uk Parliament is due to return from the holidays, and there will be a vote in the Commons on PM May's and the EU's agreed withdrawal agreement and the political declaration outlining ambition for future talks. The vote by the MPs on the deal had been scheduled for 11 December, but May postponed it until January when it became clear her deal would be rejected, leading to widespread anger in the Commons.
Analysts at Commerzbank expect to see the market challenge the 0.9101 August high. "Above .9101 would target the top of the 2016-2018 channel at 0.9172. Below 0.8941 lies the 200-day ma at 0.8843."