EUR/GBP Price Analysis: Euro testing trendline resistance near 0.9100

EUR/GBP bounces up from 0.9020 and extends to 0.9100 area
The euro is testing trendline resistance at 0.9100.
The pound dives across the board as Brexit deal hopes fade.

Guillermo Alcala FXStreet

The euro has gone through a V-shaped recovery against the British pound on Monday, bouncing up from 0.9020 lows to reach session highs near 0.9100. The pair is now pushing against ther downward trending line from mid-September highs.

Pound strength falters as Brexit deal hopes vanish

The pound has been trading back and forth on Monday amid the contradictory messages coming from the Brexit negotiators. Investors’ hopes of a last-minute deal favoured the GBP, which opened the week on a stronger note, pushing the euro to session lows on the lower range of 0.9000.

The pair, however, managed to bounce up, as the UK negotiators closed the doors to an extension of the talks and called to get ready for an Australian-like exit. These comments have sent the GBP dropping across the board, boosting the euro higher to test the mentioned resistance line in the area of 0.9100.

A confirmation above 0.9100 would break downtrend channel of the last six weeks and might increase bullish momentum, pushing the pair towards 0.9160 (October 7 high) and 0.9220 (September 22, 23 highs). On the downside below the intra-day low at 0.9020, the pair next levels might be channel support, now at 0.8990 and early September lows at 0.8865.

EUR/GBP daily chart

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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