EUR/USD above 1.11 on Brexit optimism

Traders bought the euro on Thursday following news that the European Union and the United Kingdom have finally reached a deal. Thus, the EURUSD pair was trading half a percent stronger during the US session, hovering at around 1.11.

However, shortly after this positive news, the Northern Ireland's DUP party said it could not support Johnson's Brexit deal when it is set for a vote on Saturday. Sterling tanked after this comment and erased all the daily gains, while EU indices also fell afterward.

From other news, US housing starts dropped notably in September to 1.256 million from 1.386 million in August, while building permits also declined to 1.387 million from 1.425 million previously.

Moreover, the US industrial production came out below estimates as well. Following August's surprise surge in industrial production, September saw a big disappointment with headline output dropping 0.4% month-on-month (twice as bad as the 0.2% drop expected). And worse still, on a year-over-year basis, industrial production has shrunk for the first time since Trump's election in November 2016.

Technically speaking, the first stronger resistance now appears to be at around 1.11650 and if the pair jumps above it, further rally toward previous highs at 1.1240/50 could occur.

On the downside, the swing support seems to be at 1.1050 and as long as the EURUSD remains above this support, the short-term outlook might be bullish, with dips probably being bought.