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EUR/GBP erases losses, no Brexit deal

  • No breakthrough in Brussels in Brexit talks. 
  • Pound reverses sharply erasing most of day’s gains. 
  • Negotiations will continue during the week. 

The EUR/GBP pair dropped earlier today to 0.8755, the lowest in four weeks after the media reported a potential deal on the Irish border. During the last hours, the pair lost ground and rose back above 0.8800 after it was clear that an agreement on Brexit was not going to be reach today. 

“It was not possible to reach a complete agreement today,” European Commission President Jean-Claude Juncker said. The media is reporting that the Irish border still remains an issue. UK Prime Minister Theresa May mentioned that more talks are needed and negotiations will continue. An agreement during the week is needed so that EU leaders can conclude at the December 15 meeting that negotiations achieved sufficient progress so talks can advance to other topics. 

The lack of agreement weakened the pound but still remains above daily lows. EUR/GBP peaked at 0.8829, slightly below daily highs and, as of writing, it was hovering around 0.8800, lower for the day but far from the lows. 

Levels to watch 

To the downside, 0.8780 is again a support, followed by 0.8750/55 (Dec 4 low) and 0.8730 (Nov 1 low). On the upside, immediate resistance is seen at 0.8840  (Dec 1 high / Nov 21 low) and above at 0.8870 and 0.8890 (Nov 22 high / Nov 24 low).

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