EUR/GBP eases off daily tops after May's Brexit speech

The EUR/GBP pair started to erase its daily gains following an initial spike to a fresh daily high at 0.8875 during UK PM Theresa May's Brexit speech in Florence. As of writing, the pair is trading at 0.8840, up 0.6% on the day.

Theresa May said that they were able to make concrete progress on many important issues since the triggering of Article 50, however, she didn't share any surprising details about the UK's stance in Brexit negotiations. May argued that a transition period would be necessary to provide business with the extra time they need to make adjustments. She further added that the UK would be leaving the single market and the customs union, but would work on a new partnership deal. 

• UK PM May: Will be leaving single market, customs union
• UK PM May: We have made concrete progress on many important issues

The GBP showed a mixed reaction to May's remarks. After weakening during the first half of the speech, the currency started to gather strength against its peers. The GBP/USD pair eased to 1.35 mark before rebounding toward mig1.35s. 

Earlier in the day, the PMI data from the Eurozone showed that the activity in manufacturing and the service sectors expanded at a faster pace than markets anticipated in September, allowing the shared currency to find demand. In fact, the Euro Index is now at 95.21, gaining 0.18% on the day.

Technical levels to consider:

The pair could face the first technical support at 0.8800 (psychological level) ahead of 0.8770 (Sep 15 low) and 0.8675 (Jun. 7 low). On the upside, resistances align at 0.8900 (psychological level/Sep. 19 high), 0.9000 (psychological level) and 0.9040 (Sep. 13 high).