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EUR/GBP rises back to the 0.9000 area as pound weakness

  • The pound remains vulnerable amid Brexit and UK political uncertainty. 
  • EUR/GBP bounces to the upside, remains in the range of the last four weeks. 

The EUR/GBP pair bounced from near weekly lows and printed a fresh daily high at 0.9005. As of writing, is hovering around 0.9000, posting gains for the second-day in-a-row. 

The move to the upside took place amid a correction of the pound across the board. It remains weak ahead of next week Brexit deal vote at the UK Parliament. The debate is excepted to start on Thursday, and the outcome is unknown. Today the government mentioned that is not looking for an extension of Article 50. Any rally in the pound is likely to be limited as long as there is no clarification on the next steps on Brexit. 

Levels to watch 

Earlier today, EUR/GBP dropped to 0.8945 and then rebounded. It appears to have reached a bottom in the short-term near 0.8950. Now indicators point to the upside with the pair moving out of the lower limit of the trading range of the last few days. 

To the upside, the next target could be seen at 0.9030 while above the next resistance is 0.9060 followed by 0.9100. A daily close clearly above 0.9060 would suggest more gains ahead. On the flip side, the immediate support might lie at 0.8970 and then at 0.8940/45. A firm break under 0.8940 is likely to be followed by more losses and a potential test of 0.8900. 
 

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