Key talking points:
- Barnier suggests discussions are running out of time and important differences remain
- EUR / GBP continues to be limited as the deadline approaches
EUR / GBP remains at the mercy of Brexit headlines as volatility remains high. A few headlines this morning from EU chief negotiator Michel Barnier gave the impression that while both sides are working hard for a deal, time is running out and important differences remain.
Recommended also by Daniela Sabin Hathorn
Introduction to Forex News Trading
This put the pound on the defensive, removing some of the sense of risk she had enjoyed so far. The talks appear to have remained in the dark for now, as next weekend is likely to be a watershed situation for a trade deal, at least EU leaders are asking for it.
EUR / GBP daily chart
EUR / GBP continues to be confined as it attempts to break free from the 0.90 area after a higher thrust was rejected in the 23.6% Fibonacci area at 0.9223. The pound’s bullish momentum then pushed the pair lower, testing a breakout below the 0.90 level, but increased buying pressure was seen at 0.8985.
Momentum indicators show continued support for a higher push, but the 50-day moving average has now fallen below the 200-day average, indicating increasing downward pressure. This could lead to an attempt to break horizontal resistance at 0.8950, followed by the 7 month low at 0.8864.
EUR / GBP weekly chart
The weekly chart shows that the price action is consolidating the end of a symmetrical triangle formed since the beginning of March. Symmetric triangles usually see an increase in volatility as there must be an expected breakout in both directions.
On the downside, a fall below 0.88865 could lead to continued bearish pressure towards 0.8560 which would see EUR / GBP re-enter the side channel in early 2020. On the upside, a break above 0.9155 would likely lead to an increase resistance at 23.6. % Fibonacci at 0.9223.
of customers are net long.
of customers are net short.
— Written by Daniela Sabin Hathorn, Market Analyst
Follow Daniela on Twitter @HathornSabin