Brexit Article 50 impact: EUR/GBP gapped higher

UK PM Theresa May came out with a more concrete Brexit time table over the weekend. This resulted in a across the board gap down opening in GBP.

EUR/GBP cross opened higher at 0.8690 and traded around 0.8685 levels at the time of writing. PM announced over the weekend that the article 50 would be triggered by March 2017.

The British PM also suggested on Sunday that the country’s exit from the EU would lean towards a “hard Brexit”, meaning that regaining in control of immigration is more important than the access to the single market.

The Brexit time table has been released over the weekend; this means UK and US desks never got an opportunity to respond to the news on Friday. Consequently, fresh GBP offers could be noted at London open and NY open.

On the data front, manufacturing PMI releases across the Eurozone along with UK manufacturing PMI release could influence the pair.

EUR/GBP Technical Levels

A break above 0.8725 (Aug 16 high) would open doors for 0.8769 (Aug 2013 high). A violation there could yield 0.8815 (Feb 2013 high). On the other hand, a breakdown of support at 0.8679 (Sep 23 high) would open doors for a sell-off to 0.8643 (5-DMA) and 0.86 (zero figure).