EUR/GBP advances to daily highs near 0.8870 as GBP weakens on political jitters

• British Foreign Secretary Boris Johnson resigns.
• Theresa May is delivering a speech in the House of Commons.
• GBP/USD loses more than 100 pips in the last hour.

The EUR/GBP pair gained traction in the last hour and erased all of its daily gains to turn positive above mid-0.88s as the GBP came under a strong selling pressure. As of writing, the pair was trading at 0.8870, adding 0.35% on the day.

Earlier today, despite the news of British Brexit Secretary David Davis quitting his position, the GBP was able to find demand as the latest talks suggested that Prime Minister Theresa May’s new customs arrangement in the Brexit plan received support from the  government. In fact, the EUR/GBP pair dropped to a daily low near the 0.88 mark.

However, May’s office has recently confirmed the reports of British Foreign Secretary Boris Johnson’s resignation and weighed heavily on the GBP as this development heightened the concerns over political integrity in the UK.

Meanwhile, May is delivering her speech at the House of Commons saying that the EU’s models on offer for the future relationship at the moment were simply not acceptable. May further added that they needed to be prepared for a range of outcomes including a ‘no-deal Brexit.’

Technical levels to consider

The pair could face the first resistance at 0.8900 (psychological level) ahead of 0.8965 (Mar. 7 low) and 0.9000 (psychological level). On the downside, supports are located at 0.8815 (daily low), 0.8750 (Jun. 22 low) and 0.8700/0.8695 (psychological level/May 29 low).