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Looks to Brexit Negotiation Development For Next Directional Impetus

EURGBP
MNI (London)
  • Friday's break and close above its key 10-dma (current level Gbp0.8929) saw rate extend its recovery to Gbp0.9000 ahead of Friday's close (close Gbp0.8982).
  • Sterling lost ground Friday on the back of less than optimistic comments from officials going into the weekend Brexit trade negotiations but positive press reports greeted Asian traders.
  • Times suggests that the European Commission is leaning on EU negotiator Barnier to get a deal done, whilst the Telegraph suggest a break through in fishing(one of the main sticking points) could be close.
  • These reports have allowed sterling to claw back some lost ground, the cross easing below Gbp0.8960 in early Europe. Support seen into Gbp0.8955/50, a break to expose the mentioned 10-dma.
  • However, whilst rate holds above the 10-dma it keeps the upside favoured, a break and close below to negate this view.
  • Resistance Gbp0.9000 ahead of the top of the 1.0% 10-dma envelope at Gbp0.9019.
  • MNI Techs: EURGBP traded sharply higher Friday, extending the recent recovery off the Nov 23 low. Friday's gains resulted in a test of the key trendline resistance drawn off the Sep 11 high at 0.9000. The line intersects at 0.8995 today. A breach of the trendline would signal a potential reversal and pave the way for a stronger short-term recovery towards 0.9069 initially, Nov 5 high. While the trendline holds, the outlook remains bearish. Key support is at 0.8861.
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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