EURGBP Trades Lower As EU Welcomes New UK PM

 

“We look forward to working constructively with PM Boris Johnson when he takes office, to facilitate the ratification of the withdrawal agreement and achieve an orderly Brexit.”

These were the words contained in a tweet by European Union (EU) Chief Brexit negotiator Michel Barnier, as he welcomed the new British PM Boris Johnson. A further tweet by Barnier stated:

“We are ready also to rework the agreed declaration on a new partnership in line with EUCO guidelines.”

The key bolded words in the tweets were enough to bolster the Cable, which made a 40-pip incursion against the Euro on the announcement. The single currency has been having a hard time in Tuesday’s London trading session, weakened by the market sentiment of an expected stimulus package from the European Central Bank.

EURGBP Technical Plays

The EURGBP pair hit an intraday low of 0.89587, testing the S1 daily pivot support as it did so. This price level has held as support for the EURGBP throughout the month of July 2019, having been tested several times within the month already.

A downside violation of the intraday/weekly support of 0.89587 will open the door for price to push towards the S2 pivot of 0.89351. Rejection of price at the current support level will bring the resistance at 0.89793 into focus (highs of between June 17 and July 4).

Traders looking to sell on rallies may need to wait for tomorrow’s Flash Services and Manufacturing data from France and Germany to see if these price areas are invalidated or supported by the news.Don’t miss a beat! Follow us on Twitter.

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