EUR/GBP has been on a bearish trend since the middle of October, after Boris Johnson and the EU reached a Brexit deal. The GBP surged higher, which sent EUR/GBP diving nearly 500 pips lower in the first week, although the downtrend stalled in the following weeks after the UK Parliament voted BoJo’s deal down.

Although, the GBP kept the bullish bias, as the UK heads towards general elections on December 12. Then the downtrend resumed again last week after the Brexit Party stood down from areas where Conservatives are strong and challenge the Labour zones instead, giving the Tories a great advantage, which are leading the polls confidently.

This improved the sentiment further for the GBP and sellers resumed their game last week. Earlier this week we saw a retrace higher on the H4 chart, but the 50 SMA held as resistance on this time-frame. It stopped the climb and we decided to go short on this pair. Today, sellers have come back into the game again, as buyers failed to break above the 50 SMA, so this pair is heading down now.