EUR/GBP touches a low of 0.8720 on the day
Price touched a low of 0.8720 before bouncing off it now a little. That coincides with the key support region seen from 16 June 2017 low, a level which has helped to limit downside moves in the past on several occasions.
The low today is a five-month low for the pair and breaks the October low of 0.8723. But it’s all about the support level mentioned. Right now, it’s a tough ask for sellers to push through to break below that as there is also support to come from the 61.8 retracement level @ 0.8693. That is another level that has proven to be a key area for buyers to lean on.
However, if there is any catalyst for the pound to rally further against the euro, a Brexit deal optimism is one that can surely provide the breakthrough. Optimism is back up again on the day following Raab’s thumbs up earlier and further backing of a consensus being struck among parliament members will no doubt unleash further gains in the pound.
If that scenario pans out, the year’s low @ 0.8621 will also be under threat surely. But let’s not get too carried away, there has been plenty of false dawns before on a Brexit deal. Cautious optimism is the still right approach. It’s all about headlines now and things can get pretty dicey when we’re at this stage of the trading game. Be careful out there.