- EUR / GBP fails near 0.8940, retreating to the 0.8900 zone.
- Brexit uncertainty hurts the pound.
- The euro remains dangerously close to the 0.8860 support zone.
The euro it appreciated in early trading Thursday, after rebounding from Wednesday’s lows of 0.8890, although the bulls have lacked a follow-through at the 0.8940 zone, and the pair returned to the 0.8900 zone again.
Brexit uncertainty weighs on the pound
The pair continues to trade without clear direction for the third day in a row, dangerously close to multi-month lows at 1.1840. The British pound has been moderately weaker across the board amid growing uncertainty about the outcome of the Brexit negotiations.
UK Finance Minister Rishi Sunak has expressed confidence in the chances of reaching a post-Brexit deal with the EU as negotiations continue, with differences on key issues, namely fishing rights, as the main obstacle to the deal.
Sunak’s comments have offset market concerns raised by European Commission President Ursula van der Leyden, who said on Wednesday that the deal is far from secure.
EUR / GBP continues lateral movement around 0.8900
From a technical perspective, EUR / GBP is still hovering around 0.8900, with key support at 0.8860 (June, September and November lows) close behind. A bearish move through there could push the pair towards 0.8800 / 10 (May 4-11 highs) and 0.8740 (61.8% Fibonacci retracement of the February-March rally).
On the upside, the pair should break 0.8960 (November 19 high) to ease downward pressure and extend towards 0.9000 (November 12 and 13 high) and 0.9050 / 65, where the November 5 and 6 highs are meet the 50 and 100 day SMAs.
Technical levels
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