- EUR / GBP is pushing lower to test support at the 0.9045 area.
- The pound remains moderately offered on hopes of a Brexit deal.
- EUR / GBP remains trapped within a clear downtrend channel.
The euro has been moving in no clear direction against the British pound on Tuesday, before declining during the US session and hitting daily lows at 0.9045.
Hopes for a Brexit deal offer support to the British pound
The British pound has been offered moderately against the euro for the past two days. News of the extension of Brexit negotiations has raised hopes for a deal that would prevent a hostile withdrawal. EU representative Michel Barnier resumed talks in London on Tuesday in an attempt to close a deal, less than 10 weeks before the deadline to leave the Union.
However, the momentum of the optimistic Brexit news on the pound has dimmed, and investors are increasingly wary of future challenges for the UK economy, with coronavirus infections growing at record levels and expected. that the Bank of England introduces negative interest rates next year.
EUR / GBP trapped within a downtrend channel
From a technical point of view, the euro remains trading within a negative channel since the highs of mid-September. On the downside, immediate support is at 0.9040 (Oct 26 low) and below 0.9005 (Oct 14 low) and trend line support now around 0.8955.
On the upside, a bullish reaction would find resistance at 0.9100 (trend line resistance). A clear break from that level could add bullish traction, to test 0.9150 / 60 (October highs) and 0.9220 (September 22 high).
Credits: Forex Street
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