EUR/USD: Probing 100-day average, focus on Brexit

EUR/USD's rally seems to have stalled near the 100-day average hurdle.
UK's Prime Minister Johnson faced an uphill battle to pass Brexit deal in parliament.
Brexit uncertainty and dismal China may keep the EUR below the 100-day average.

Omkar Godbole FXStreet Contributor

EUR/USD is currently trading just below the 100-day moving average (MA) of 1.1137, having invalidated a bearish lower highs setup with a convincing close above 1.1110 on Thursday.

The pair rallied by 0.48% on Thursday on the news that the UK and European Union's negotiating teams (EU) have reached a Brexit withdrawal agreement.

The rally, however, stalled near the 100-day MA in the overnight trade, possibly due to fears that the agreement could be rejected by the UK parliament.

After all, Prime Minister Johnson will face a deeply divided parliament on Saturday, where the opposition will try to delay the deal and another referendum. Further, Johnson's Brexit agreement has been rejected by the Nothern Irish ally – the Democratic Unionist Party.

Put simply, the odds of the UK parliament approving the latest Brexit deal are quite low. The uncertainty will likely keep the EUR below the 100-day MA.

Also, the equities will likely remain under pressure due to the dismal China data, keeping the EUR bulls from pushing the pair above the long-term average. The official data released in the Asian session showed China's economy grew 6.0% from a year ago in the third quarter – the lowest in at least 27.5 years, according to Reuters records.

Both Pound and the EUR would pick up a strong bid if the DUP softens its stance ahead of Super Saturday. In that case, the EUR/USD may close above the 100-day MA resistance for the first time since July 18.

The European data calendar is light with just the Eurozone's current account figures for August, scheduled for release at 08:00. The current account seldom triggers big moves in the EUR pairs.

Technical levels

EUR/USD

Overview
Today last price	1.1127
Today Daily Change	0.0003
Today Daily Change %	0.03
Today daily open	1.1124

Trends
Daily SMA20	1.099
Daily SMA50	1.1039
Daily SMA100	1.1139
Daily SMA200	1.1212

Levels
Previous Daily High	1.114
Previous Daily Low	1.1065
Previous Weekly High	1.1063
Previous Weekly Low	1.0941
Previous Monthly High	1.111
Previous Monthly Low	1.0885
Daily Fibonacci 38.2%	1.1112
Daily Fibonacci 61.8%	1.1094
Daily Pivot Point S1	1.1079
Daily Pivot Point S2	1.1034
Daily Pivot Point S3	1.1004
Daily Pivot Point R1	1.1154
Daily Pivot Point R2	1.1185
Daily Pivot Point R3	1.123

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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