EUR/GBP Bounces Off the 100 SMA, With No EU-UK Trade Deal in Sight - Forex News by FX Leaders

EUR/GBP Bounces Off the 100 SMA, With No EU-UK Trade Deal in Sight

Posted Monday, September 7, 2020 by
Skerdian Meta • 1 min read

The EUR/GBP turned bearish in August, with the GBP/USD climbing more strongly than the EUR/USD. This forex pair lost nearly 300 pips, as the attention was turning towards the economic recovery from the coronavirus lockdowns, and the recovery in the Eurozone has slowed down considerably.

The 50 SMA (yellow), which was providing support during June, turned into resistance for most of August, when the price slipped below that level. The price continued to fall lower, reaching the 100 smooth moving average (gray) on the H4 chart, at 0.8860-70, which turned into support.

That moving average was pierced briefly on Thursday, but it reversed back up, and has bounced to around 130 pips now. The Brexit process has remained in the shadows since March, when the coronavirus broke out in Europe, but it has now resumed, and the situation right now doesn’t point to a trade deal, as Boris Johnson is trying to override parts of the deal, which means that the UK will leave the EU without a Brexit deal. That would be detrimental to the GBP, since the EU is the United Kingdom’s largest trading partner.

 

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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