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  • Difficult enough trying to get a handle on  UK-EU Brexit negotiations,  UK ministers are resigning.
  • Senior sources confirmed Mr Davis has resigned as Brexit secretary.

EUR/GBP has oped the week with a bearish gap on initial sterling strength, but the news that UK ministers are resigning amid reports of a split in the UK government on the plan PM May announced at Chequers has reversed those gains. EUR/GBP is currently trading at 0.8837 vs an initial low of 0.8821 and a high of 0.8840.

It has been difficult enough trying to get a handle on how UK-EU Brexit negotiations were progressing, but that was being made even more complicated by the fact that the UK ruling Tory party couldn’t make up its own mind about what kind of ‘Brexit’ it wanted, explained analysts at ANZ Bank New Zealand Limited:

“However, it looks like at least that element has now been settled on (for now at least), with UK PM May winning key Cabinet backing that includes a plan for a UK-EU ‘free trade area for goods’. In other words, a ‘soft Brexit’. Not only that, but May has put her foot down and told her colleagues that if they criticise the government they must resign. This is of course only another small step along what remains a rocky and uncertain road, but the pound rose on the news, and with UK data showing signs of stabilising too, perhaps that trend can continue.”

EUR/GBP levels

EUR/GBP had charted a strong rebound off the 0.8800 level with a look in at the 55-week moving average at 0.8861, however, analysts at Commerzbank argue that we will need to see a close above 0.8861 to confirm the break higher ,”currently we are inclined to go with this move as it looks pretty directional (note the buy signal on the daily DMI). We would now allow for a recovery to the 0.8969 recent high and the .9034 October 2017 high.”