Pound stuck in negative territory despite small spike as MPs reject Brexit deal

Currency traders are bracing for the most volatile for forex trading week for the pound since the EU Referendum after Attorney General Geoffrey Cox dashed hopes of the prime minister’s revised deal being backed by Parliament.

Prime Minister Theresa May’s Brexit deal has been defeated by a massive 149 votes, and counter-intuitively the British Pound recovered some of its steep losses in response suggesting the currency has a firm floor below it.

Speaking after the vote, May said the government would now commit to allowing the House of Commons a ‘free vote’ on a ‘no deal’ Brexit on Wednesday.

Should MPs reject a ‘no deal’ then a vote will take place on Thursday as to whether the UK should request an extension to Brexit.

• EUR/GBP is trading below its main SMAs suggesting a bearish bias in the short-term. 
• The level to beat for sellers is at 0.8590. The next supports are seen at 0.8560 and 0.8520 level. 
• To the upside EUR/GBP is expected to find resistance at 0.8610 and 0.8650 level.