The EUR/USD was firmly on the bear earlier today, testing the waters beneath the 1.1000 natural area of support. However, a mid-session shift in sentiment has driven a rebound above the 1.1025 quarter-handle. It appears that Brexit news is once again the culprit behind the action.

Reports are surfacing that E.U. and U.K. negotiators are preparing to sign on to an initial Brexit deal. While these stories are largely unsubstantiated, the GBP/USD and EUR/USD are catching bids, reversing early-session weakness.

EUR/USD Reverses Course On Brexit News

By far, one of the largest forex underpinnings of the past year has been Brexit. Today has brought another stimulus, with several of the majors reacting to the latest buzz over a potential Brexit deal. For now, it appears that currency players are optimistic about the prospects of an agreement and orderly exit of the U.K. from the E.U. Ultimately, only time will tell as the 31 October Brexit Day is rapidly approaching.

Here are the levels to watch for the near future:

• Resistance(1): 78% Current Wave, 1.1058
• Support(1): Bollinger MP, 1.0993
• Support(2): Daily SMA, 1.0972

Overview: At this juncture, optimism over a U.K./E.U. deal is the primary driver of action to the EUR/USD. However, anonymous sources are stating that ratification of the agreement depends upon support from the Democratic Unionist Party (DUP) of Northern Ireland. Once again, Brexit boils down to a compromise on the Irish backstop; should a deal be made this time around, be on the lookout for significant bids to hit the EUR and GBP.