- EUR/GBP has started out the week just below the pivot at 0.8855 and ahead of the 61.8% in the 0.8830s, (55-D SMA and 200-D SMA converge in the same area).
- The Brexit deal was endorsed by EU leaders at the weekend summit with the focus now turning to whether the UK Parliament will approve it.
- EUR/GBP was recently rejected by the end of October highs at 0.8940 and made a recent low of Brexit optimism as progress had been made towards a deal.
The spike in sterling last week followed the news that a twenty-six-page political declaration which sketched out the future relationship between the EU and Britain for decades to come had been put together which coupled with the the draft terms of the UK's exit from the EU on 29 March 2019 in a five hundred and eighty-five-page divorce treaty being agreed, paths the way for PM May to take both the UK Parliament for approval; However, this is likely where PM May will face her toughest challenge.
PM May now faces at least 91 Conservative MPs are against the Agreement
PM May has already delivered a letter to the nation saying that the agreement delivers Brexit, gives the UK back control over its borders, safeguards the rights of citizens, cuts payments to the EU and sets a bright and secure future for the UK. However, the Sunday Telegraph has reported that 91 Conservative MPs are against the Agreement and such a number voting against it will make it impossible for the deal to pass at the moment and that is where, fundamentally, the cross will struggle to break a strong area of technical confluence.
EUR/GBP levels
On the downside, on a break below the 61.8% fibo and 200-D SMA opens the next key support zone which sits between the July low at 0.8799 and the November 12 high at 0.8774. This area guards October's key support level at 0.8723. Meanwhile, 0.8940 opens the July peak at 0.8960. The early August and September highs are located at 0.9031/54.
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