- EUR/GBP pares Tuesday’s losses and returns above 0.9000.
- The pound remains weak with Brexit negotiations on standstill.
- EUR/GBP: Bearish pressure grows for a test of 0.8913 – Credit Suisse.
The euro has bounced up from session lows at 0.8945 on Wednesday’s early trading and is retracing Tuesday’s decline against a weaker British pound to return above 0.9000.
The pound remains on the defensive
The sterling has been unable to take advantage from the moderate US dollar pullback as risk appetite returned during the European and US trading sessions. The cable remains negative against its main peers, with the EUR/GBP appreciating 0.5% on the day with all eyes on the developments of the US elections’ vote count.
News from the Brexit has failed to offer support to the sterling and the UK chief negotiator, David Frost, has reiterated the divergences in some core issues after two weeks of intense negotiations.
The negotiations are due to continue in London this weekend and the market remains apparently confident on a late-minute deal that will avoid a “hard Brexit. This is protecting the pound from more aggressive selling pressure.
EUR/GBP: Bearish pressure grows for a test of 0.8913 – Credit Suisse
From a wider perspective, the FX Analysis team at Credit Suisse sees the pair biased lower, likely to test the 200-DMA at 0.8913: “EUR/GBP remains below its 13 and 55-day averages and has now not only seen a clear break of key price support from the lows of the past two weeks at 0.9009/05 but now also trend support from late September and briefly its uptrend channel from late April. Our bias stays lower for a clear break here to increase the risk we are seeing a more important topping process with support seen next at the 200-day average at 0.8913.”
Technical levels to watch
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