- The EUR / GBP reversal from 0.9145 extends towards the 0.9000 zone.
- The euro sinks 1.2% amid the strength of the pound.
The euro made a false breakout of the five-week bearish channel on Tuesday as the pair turned south, dropping around 1.2% so far today to test the bottom of the trading range of the past two weeks, at 0.9000.
Pound recovers as Brexit talks resume
The pound has appreciated against its main rivals on Wednesday after Bloomberg reported that Brexit talks will resume this week after last weekend’s unexpected close. The report suggests that negotiators aim to reach an agreement in mid-November.
This news has boosted demand for the British pound, pushing the euro more than 100 pips lower on the day, to hit session lows just above the 0.9000 support area.
A confirmation below 0.9000 (Oct 14 low) could push the pair towards trend line support from late April / early May lows, now around 0.8945 before heading to 0.8870 (3 Oct low). of September).
On the upside, a potential recovery from current levels should extend beyond the 100 and 50 day SMAs, at 0.9045 and 0.9065 respectively before targeting 0.9145 (Oct 20 high).
Daily chart
Credits: Forex Street
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