EUR/USD Finally Broke Above the 200 SMA as Sentiment Improves on the Brexit Deal
[[EUR/USD]] turned pretty bullish in the last two weeks for several reasons. First, it was the soft economic data from the US in the first week of this month which turned the USD bearish, then it was the partial trade deal from the US and China which improved the sentiment towards the end of last week, turning risk assets higher.
This week though, the climb stalled and this pair traded sideways between moving averages. The price was finding resistance at the 200 SMA (purple) on the H4 chart at the top side and support at the 100 SMA (red) at the bottom. Although, on Tuesday it was the 50 SMA which reversed the price higher after the 100 SMA was broken.
Although, yesterday this pair made a decisive move as we headed closer towards a Brexit deal and broke the 200 SMA in the US session. Today we heard rumours earlier as the EU chief Brexit negotiator Barnier said that a deal was as good as done, while now we hear the the deal has been reached.
This is a breakthrough and the risk sentiment has improved considerably. The GBP is surging higher, having climbed around 200 pips higher, which is pulling EUR/USD up as well. So, now this pair has turned quite bullish once again and it should remain like this for some time until the sentiment fades and traders focus on economics again, which are pretty bad for the Euro at the moment.
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