EUR/GBP bounces off 4-week lows in sub-0.8800 levels

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EUR/GBP bounces off 4-week lows in sub-0.8800 levels

  • EUR/GBP rebounds from 0.8800 levels on Friday.
  • GBP-selling helping the cross to regain traction.
  • Hopes of a Brexit deal came under pressure in past hours.

The selling mood around the Sterling is lifting EUR/GBP to the 0.8830 regions, where converge the key 200-day SMA.

EUR/GBP firmer on GBP-weakness

Sellers have returned today to the British Pound in response to fading optimism around a potential Brexit deal, all ahead of the meeting between S.Barclay and M.Barnier later today.

In fact, GBP is losing some upside traction at the end of the week after EU negotiator M.Barnier ruled out any significant progress in EU-UK talks, while deemed as a backward step the recently published UK’s non-papers.

In addition, there is no news around the Irish backstop, playing against recent rumors regarding the likelihood of an agreement on that issue.

It is worth recalling that GBP rebounded sharply and reached fresh highs vs. both the single currency and the Greenback after EU’s J.C.Juncker showed on Thursday some (over) optimism in clinching a deal by end of October.

EUR/GBP key levels

The cross is gaining 0.12% at 0.8825 and faces the next hurdle at 0.8906 (50% Fibo of the May-August rally) seconded by 0.8949 (100-day SMA) and then 0.9041 (55-day SMA). On the downside, a breach of 0.8785 (monthly low Sep.20) would expose 0.8667 (78.6% Fibo of the May-August rally) and finally 0.8488 (monthly low May 6).

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