- EUR / GBP cuts Tuesday’s losses and returns above 0.9000.
- The pound remains weak with the Brexit negotiations stalled.
- EUR / GBP: Bearish pressure builds for a test of 0.8913 – Credit Suisse.
The euro It has rebounded from session lows at 0.8945 in early trading on Wednesday and is reversing Tuesday’s decline against a weaker British pound to return above 0.9000.
The pound remains on the defensive
The British pound has not been able to take advantage of the moderate pullback in the US dollar as risk appetite returned during the European and US trading sessions. Cable remains negative against its major peers, with EUR / GBP appreciating 0.5% on the day with all eyes on the evolution of the US election vote count.
Brexit news has offered no support for the British pound and UK chief negotiator David Frost has reiterated divergences on some central issues after two weeks of intense negotiations.
Negotiations are set to continue in London this weekend and the market remains apparently confident of a last minute deal that will avoid a “hard Brexit”. This protects the pound from more aggressive selling pressure.
EUR / GBP: Bearish pressure builds for a test of 0.8913 – Credit Suisse
From a broader perspective, Credit Suisse’s currency analysis team sees that the pair is skewed to the downside, which will likely test the 200 SMA at 0.8913: “EUR / GBP remains below its averages of 13 and 55 days and now has not only seen a clear break of key price support from last two week lows at 0.9009 / 05, but now also trend support from late September and briefly its uptrend channel from late of April. Our bias remains lower for a clear breakout here to increase the risk that we are seeing a more important top process with support seen below at the 200 day average at 0.8913 “.
Credits: Forex Street
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