Brexit
The EURGBP is trading slightly lower this morning following the Parliament’s decision on Saturday to delay approval of the Brexit deal. The sterling is currently down 0.33% against the EUR after the pair recorded a 6-month low on Thursday.
Instead of voting on the proposed Brexit deal, the British Parliament adopted on Saturday an amendment that obliges PM Boris Johnson to ask for a third extension, making sure that the UK is now not allowed to leave the EU on 31 October without legislation in place.
Nevertheless, Johnson reiterated that he plans to reintroduce legislation to leave at the end of the month, allowing the Parliament to decide between the current deal or no deal at all.
Amid the fears on Friday that the pound will make a significant gap once the Asia-Pacific trading session opens on Sunday night, the sterling opened just 0.09% lower against the euro.
EURGBP bounced off of the 88.6% Fibonacci retracement (May low to August high) on Thursday. The price action is now consolidating near the lows, waiting for the further Brexit developments.
On the upside, the trend line connecting two last week’s highs comes at 0.8680. Around 100 pips lower, the 88.6% Fibonacci retracement is located, which is expected to provide the support to EURGBP bulls once again.
Download our latest quarterly market outlook for our longer-term trade ideas.