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Fresh Brexit Hopes Counter Cross Recovery, But Underlying Tone Remains Bullish

EURGBP
MNI (London)
  • Wednesday's Brexit trade agrrement headlines from EU Barnier acted to knock the GBP, allowed EUR/GBP to extend its move above its key 10-dma with momentum taking it outside of its 1.0% 10-dma envelope.
  • Though not a resistance in itself the cross tends not to like being outside of this envelope for long, currently resting on the current level at Gbp0.9045.
  • A break back inside to expose the 10-dma, currently coming through at Gbp0.8955, though expect Gbp0.9000 to provide interim support.
  • If rate holds outside of the 1.0% envelope brings the top of the 2.0% envelope into play(Gbp0.9134)
  • Brexit headlines remain the key driver for sterling direction, some suggestions this morning for a deal by Friday but market needing confirmation.
  • UK Services PMI at 0930GMT, with BOE MPC Saunders speaking at same time.
  • MNI Techs: EURGBP has rallied sharply higher this week. The cross has cleared key trendline resistance drawn off the Sep 11 high at 0.8979. An ability to hold above the line, and Wednesday's clear breach of the 0.9000 handle, reinforces short-term bullish development and signals a reversal. The focus now turns to the 0.9095 vol band resistance. On the downside, initial support is seen at 0.8979, the former trendline resistance.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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