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  • EUR/GBP consolidates GBP rally, capped by technical resistance.
  • Brexit will be coming back to the fore this week. 

EUR/GBP is consolidating around 0.85 the figure as traders wait for the Brexit shenanigans to commence for 2020 with a meeting to take place this week between UK PM Boris Johnson and new president of the European Commission Ursula Von der Leyen in London.

EUR/GBP has travelled between a low of 0.8492 and a high of 0.8544 at the start of the week, trading -0.35% at the time of writing as the pound rallies from technical support vs the greenback some 0.70% on the day. There was little rhyme nor reason for the rally although Markit Services PMI was a slight improvement from 49 prior to 50, beating expectations of 49.2. 

UK PM Johnson to meet with the new president of the European Commission on Wed

Meanwhile, the visit by the European Commission Ursula Von der Leyen comes ahead of Britain’s expected exit from the EU on January 31 and will provide the first opportunity for Johnson to outline the UK’s opening position in talks, which are set to officially begin in February or March. 

EUR/GBP levels

EUR/GBP had been trying to recover but its path was blocked by the 5-month downtrend at 0.8589, as noted by analysts at Commerzbank. “Near-term, while capped here a negative bias will persist. We will err on the bearish side and allow for another failure and possible retest of the .8239 recent low, together with the 55 quarter moving average at 0.8226. Above the 0.8609 December-high would allow for a test of the 200-day ma at 0.8784.”