- Pound jumps in the market on Brexit headlines.
- EUR/GBP remains vulnerable despite 150-pips decline.
The EUR/GBP pair dropped from one-month highs to the lowest in two weeks, leaving multi-month lows exposed. A rally of the British Pound pushed the pair sharply lower during the American session, making a dramatic reversal.
Brexit, this time boosted GBP
After a meeting with UK Primer Minister Boris Johnson, Irish PM Leo Varadkar said a Brexit deal is possible following and triggered a rally of the Pound. A deal has not been achieved yet and difficulties are seen ahead as the deadline approaches. On Friday negotiations between UK and European Union officials will continue.
Now, a deal looks like a possibility and the outlook for GBP crosses changed dramatically. The Pound had the best day in years. An improvement in risk sentiment also benefited the currency. The Euro dropped versus the Pound Pound but EUR/CHF jumped approaching 1.1000.
The pair dropped from 0.9018 to 0.8829 in a few hours, falling from monthly highs to weekly lows. During the slide broke key technical support levels and it nows looks vulnerable to more losses ahead of Friday’s Asian session. The next support is the 0.8800 area that if broken would expose 0.8785, the September low.