- Pound rises further across the board after the latest Brexit headlines.
- EUR/GBP extends correction from three-month highs, test 100-day moving average.
The EUR/GBP broke below 0.9060 and fell to 0.9035, reaching the lowest level since Thursday. As of writing it is hovering slightly below 0.9050, down 60 pips for the day. The decline took place amid a rally of the pound across the board on optimism about a Brexit deal.
The BBC reported that there has been a “big buzz” amongst Tories over the last hour that the United Kingdom is heading towards a Brexit deal. Nothing has been confirmed yet. The rumour boosted the pound.
Speculations about Brexit are likely to continue to be a key driver in EUR/GBP. The pair is testing the 100-day moving average. Between 0.9050 and 0.9000, there are many resistance levels, a consolidation below, would point to a test of 0.8980; below, not much support is seen until 0.8930. On the upside, 0.9150 is still the critical resistance: a daily close above would open the doors to more gains.
Traders will focus on Brexit headlines but also this week, it the Bank of England meeting. The BoE will meet on Wednesday and announce its decision on Thursday. “We expect the Bank of England MPC to leave the policy rate at 0.10% this week. We also expect the central bank to stay the course on its asset purchases. The meeting is likely to be ‘no big deal’, as it is overshadowed by the uncertainties surrounding Brexit, and, of course, its attention grabbing headlines,” explained Rabobank analysts.