- Sterling got a strong boost Monday after negotiations agreed to extend Brexit talks.
- Barnier, the EU negotiator, reiterated that two key conditions remain unresolved in the Brexit negotiations.
- A rally in the shared currency further contributed to limiting the EUR / GBP slide.
The crossing EUR/GBP it witnessed some selling during the early European session and refreshed the daily lows, around the 0.9065-60 region in the last hour.
The pair was unable to capitalize on its attempted intra-day recovery move, instead finding new offer near the 0.9115-20 region amid revived hopes of a last-minute Brexit deal. Investors became optimistic that the UK and the EU will secure a free trade deal after negotiators agreed to extend trade talks beyond Sunday’s deadline.
Buying interest around the British pound accelerated in the last hour following comments from the EU’s main Brexit negotiator, Michel barnier, saying that two conditions remain unresolved in the talks. Barnier added that negotiators will give every opportunity to reach an agreement, a factor that impressed the GBP bulls.
However, investors are still unclear if a no-deal scenario can be avoided. This, coupled with a modest rally in the shared currency, extended some support to the EUR / GBP cross and helped limit any further losses, at least for now.
EUR / GBP has now eroded a major part of last week’s strong bullish move and sustained weakness below the 200 hourly SMA could pave the way for further weakness. The developments surrounding the Brexit saga will play a dominant role in influencing the EUR / GBP crossover and will provide some commercial momentum amid the absence of relevant economic releases to move the market.
Technical Levels
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