EUR/GBP: Sellers remain present on Brexit optimism

News
  • With the British House of Commons supporting to take control of Brexit issues from the government, Pound traders remain positive for soft proceedings ahead.
  • Wednesday’s voting on these amendments will be crucial to determining Brexit future whereas German consumer survey results could offer intermediate moves.

EUR/GBP trades near the intra-day low of 0.8560 during the early Asian session on Tuesday. The pair declined as the UK’s House of Commons voted in favor of an amendment supporting the parliament to have control of Brexit process over the government. However, actual voting on these amendments will be voted on Wednesday and the actual scenario becomes clearer by then. Meanwhile, German GfK consumer climate can offer intermediate impulse other than the Brexit developments.

On early Tuesday, the British parliament was scheduled to vote over three different amendments namely the A, F and D. Out of which, the opposition Labour party withdrew amendment D that could have given parliament to vote on seeking more time for different Brexit approaches. As a result, two motions, namely the amendment A and F, were up for voting.

Out of the two amendments, the headline Amendment A, better known as Letwin amendment, was accepted with 327 votes in favor compared to 300 dissenters. The Letwin amendment gives parliament a right over the government to hold indicative votes on Brexit options. The other one, namely the amendment F, that signaled a right to parliament to vote over no-deal Brexit before a week from the deadline, was rejected.

With the latest voting at the UK House of Commons likely giving higher authority to the parliament, if voted in favor on Wednesday, reduced uncertainty over the Brexit issue as MPs have previously created noise surrounding the PM Theresa May’s proposals.

Other than Brexit, GfK consumer confidence survey result for Germany will be closely watched after the Ifo business survey results pleased EUR buyers on Monday. The consumer survey result is less likely to change from 10.8 prior.

EUR/GBP Technical Analysis

While 0.8550 seems immediate support for the EUR/GBP pair, 0.8470 and support-line of a short-term descending trend-channel at 0.8430 can limit the quote’s additional declines.

Alternatively, 0.8650 and 50-day simple moving average (SMA) figure of 0.8680 could confine near-term upside of the pair ahead of highlighting channel resistance near 0.8715.

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