- EUR/GBP reversal from 0.9145 extends towards 0.9000 area.
- The euro dives 1.2% with amid broad-based pound strength.
The euro performed a false break of the five-week bearish channel on Tuesday, as the pair turned south, plunging about 1.2% so far today to test the bottom of the last two weeks trading range, at 0.9000.
Pound bounces up as Brexit talks resume
The sterling has appreciated against its main rivals on Wednesday after Bloomberg reported that Brexit talks are set to resume this week after the unexpected close last weekend. The report suggests that the negotiators are aiming to reach a deal by 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 right above 0.9000 support area.
A confirmation below 0.9000 (October 14 low) might drive the pair towards trendline support from late April / early May lows, now around 0.8945 before heading to 0.8870 (September 3 low).
On the upside, a potential recovery from current levels should extend beyond the 100 and the 50-day SMAs, at 0.9045 and 0.9065 respectively before aiming towards 0.9145 (October 20 high).
EUR/GBP daily chart
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