The EUR/USD pair jumped from daily lows under 1.1000 to test the 1.1045/50 area following the latest Brexit headlines and a decline of the US Dollar across the board.
Brexit and a weaker US Dollar
Bloomberg reported the United Kingdom and the European Union were near a draft deal, likely to be completed in hours. Later, EU officials and Ireland Prime Minister Varadkar mentioned that it was too premature to talk about a deal in time for the EU summit.
The Pound rose sharply across the board and it also boosted the Euro that also benefited from the improvement in risk sentiment and the rally in EUR/CHF. The US Dollar dropped sharply against its main rivals, excluding the Japanese Yen. The DXY dropped from 98.60 to 98.20, hitting a fresh daily low.
Euro recovers key technical levels
The pair was trading below a key short-term uptrend line (1.1000) and with the recent rebound, it climbed back above, easing the bearish pressure. It tested the 1.1045 area but so far it is unable to break higher. A confirmation on top of 1.1050 would expose last week’s high located at 1.1062.
On the flip side, a slide under 1.1030 could likely push the Euro back into the defensive. Below the 1.1000/05 area would be back on the radar; a consolidation below would invalidate the current ascendant channel leaving EUR/USD vulnerable to more losses.
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