EUR/GBP: SOLD OFF; Brexit noise is taking the cross for a roller coaster ride

EUR/GBP has set its sights on the downside again and was topped out at 0.8775 while the bears step back in and flex their muscles proudly as reports that, and according to the Financial Times, British Prime Minister Theresa May told her inner cabinet on Thursday that a historic Brexit deal was close:

“The prime minister never brings the cabinet together to tell them what’s going on. That’s not her style. It feels to me like the deal is practically done,” one official familiar with talks told the FT.

EUR/GBP has otherwise been an impressive counterpart to the dollar's decline

EUR/GBP has otherwise been an impressive counterpart to the dollar's decline as the euro rallies on 'slightly' improved risk sentiment following the US CPI data miss that markets were so anxious about yesterday. 

The data means very little, however, n the context of the Fed's gradual path of interest rates rises that will continue throughout 2019  as already priced into the dollar. However, it has cooled the Treasury market down where the markets and dollar are taking their cues from and ha subsequently supported a bit in EUR/USD - EUR/USD also trades as a proxy to risk sentiment. 

Meanwhile, GBP/USD is now testing R1 up at 1.3238 and a break through the level will be significant as this is where the bullish attempts have so far failed. A fade here could be equally significant though, for the short-term at least, as it would be making for a series of tops, a triple top in fact.

The pound is taking the positives out of the FT report that explained that "Theresa May briefed her inner cabinet on Thursday evening that a historic Brexit deal is close".

The concerns were that an EU withdrawal treaty that could threaten the survival of her government, with Democratic Unionist MPs — who prop up her minority government — threatening to vote it down and that the European Commission said on Thursday there was “no breakthrough yet”.

"However, rumours swept Westminster that Mrs May’s negotiating team in Brussels  led by the civil servant Olly Robbins— was close to a breakthrough",  - The FT reported, adding, "One official close to the Brexit talks said: “The prime minister never brings the cabinet together to tell them what’s going on. That’s not her style. It feels to me like the deal is practically done.”

EUR/GBP levels

We are now back to the 2017-2018 support line at 0.8767 and a break there opens territory back to 0.8750, R1, and S1 at 0.8722.  Analysts at Commerzbank explained, with respect to upside possibilities in these ever-changing trends, "Rallies will find initial resistance at .8838 200 day ma ahead of .8931 the 55-day ma and will now stay offered below here. Below .8767 will trigger losses to the .8700/.8697 June low."