EUR/GBP moving within a narrow range, limited below 0.8940
|- EUR/GBP fails near 0,8940, pulls back to 0.8900 area.
- Brexit uncertainty hurts the pound.
- The euro remains dangerously close to 0.8860 support area.
The euro appreciated on Thursday’s early trading, after bouncing up from 0.8890 lows on Wednesday, although bulls have lacked follow-through at the 0.8940 area, and the pair returned to 0.8900 area again.
Brexit uncertainty weighs on the pound
The pair remains trading without a clear direction for the third consecutive day, dangerously close to multi-month lows at 1.1840. The British pound has been moderately weaker across the board amid the increasing uncertainty about the outcome of the Brexit talks.
UK finance minister, Rishi Sunak has expressed confidence about the chances of reaching a post-Brexit deal with the EU as the negotiations continue, with the differences in key issues, namely the fishing rights, as the main obstacle for the agreement.
Sunak’s comments have offset market concerns generated by the European Commission president, Ursula van der Leyden, who affirmed on Wednesday that the deal is far from certain.
EUR/GBP the sideways movement around 0.8900 continues
From a technical perspective, the EUR/GBP keeps hovering around 0.8900, with key support at 0.8860 (June, September and November lows) at a short distance. A bearish move through there might push the pair towards 0.8800/10 (May 4, 11 highs) and 0.8740 (61.8% Fibonacci retracement of the February-March rally).
On the upside, the pair should breach 0.8960 (November 19 high) to ease bearish pressure, and extend towards 0.9000 (November 12 and 13 high) and 0.9050/65 where the November 5 and 6 highs meet the 50 and 100-day SMAs.
Technical levels to watch
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