EUR/GBP reverses and drops back below 0.8800

• Pound gets some support from Brexit hopes but uncertainty remains highs.
• Euro under pressure as EUR/USD tests 1.1800. 

The EUR/GBP pair rose earlier today to the highest level in five days but reversed sharply and now is moving toward yesterday’s low. 

Bullish tone disappears 

During the European session, EUR/GBP broke above 0.8830 and spiked to 0.8866. Then it moved between 0.8850 and 0.8825 until it broke to the downside after the beginning of the American session. 

The slide pushed the pair below 0.8800. Recently printed a fresh daily low at 0.8778 and it was trading at 0.8785, with the negative momentum prevailing. 

The slide took place amid a wave of selling around EUR/USD that fell again to test the 1.1800 handle. The euro is among the worst performers of the US session and dragged EUR/GBP lower. 

Regarding Brexit, despite the lack of agreement in current talks, investors appear to have optimism that some agreement will be reached before the EU summit. Officials warn that if a proposal doesn’t come this week, discussions about the transition and trade would be delayed. 

Levels to watch 

The immediate support for EUR/GBP is the 0.8775-70 area (Nov 30, Dec 5 low), a break lower might open the doors for a test of yesterday’s low at 0.8755; below the next support might be seen at 0.8730/35 (November lows). 

To the upside, resistance lies at 0.8795 followed by 0.8815/20. Today’s reversal took place after the pair was unable to consolidate above 0.8830. If the euro manages to rise back above that area and hold, it could remove the short-term bearish pressure.