EUR/GBP trades on a firm note in the 0.8650 region

• EUR/GBP advances to 0.8650, daily highs.
• EU extended the Brexit deadline to January 31 2020.
• MPs will vote on OM Johnson’s proposal for early elections.

The rebound in the single currency is lifting EUR/GBP to fresh daily highs in the mid-0.8600s on Monday.

EUR/GBP pushes higher post-EU decision

The European cross has regained extra poise at the beginning of the week after the EU agreed to extend the Brexit deadline to January 31 2020 (from the original October 31).

Despite the decision by the EU, uncertainty still remains around the Brexit process while MPs will now vote on PM B.Johnson’s plan to call for elections as early as on December 12.

On the EUR-side, the shared currency appears to have left behind the post-ECB weakness and it has been recovering ground on the back of the negative start of the week for the Greenback. EUR, however, is expected to remain under pressure in light of domestic data releases, the FOMC gathering (Wednesday) and the constant backdrop of the loose monetary policy stance by the ECB.

EUR/GBP key levels

The cross is gaining 0.16% at 0.8648 and faces the next up barrier at 0.8676 (high Oct.24) followed by 0.8812 (200-day SMA) and finally 0.8906 (50% Fibo of the May-August rally). On the downside, a drop below 0.8574 (monthly low Oct.17) would expose 0.8488 (monthly low May 6) and then 0.8474 (2019 low Mar.12).