EURGBP was trading at 0.9100 on Monday with a gain of 1% as negotiators kick off a tense day in the Brexit timeline. The day starts with a pre-dawn meeting with the 27 member countries to test the limits of a deal and there is also an ECB interest rate meeting on Thursday when the EU summit starts so a volatile week is in store for the euro pound rate.
Irish Prime Minister Micheal Martin said on Sunday that talks were now on a “knife edge” as he played down the chances of an agreement over the level playing field for business. The UK environment Secretary George Eustace added,
“We will continue to work on these negotiations until there is no point doing so any further, but there is no point denying that what happened late last week was a setback.”
The two sides will need to be close to a deal by Thursday’s summit in order to be sure that politicians will pass it and no veto will be forthcoming- like the one threatened by France last week.
Thursday’s European Central Bank meeting should see policymakers announce an extension to stimulus measures and traders shouldn’t be surprised if the size is larger than expected. The bank have been critical of the euro’s strength in recent months and could see this as a chance to adjust the currency rate.
EURGBP Technical Outlook
EURGBP is testing the 0.9100 level with the 0.9175 resistance now in reach. If the market fails to see Brexit progress we could see a move to the 0.9200-9300 levels. The support on the downside is 0.8870 but stops for a long position could go in at 0.8975. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.