EUR/GBP: three-month support line at 0.8937 is key

• EUR/GBP has been rejected through the top of the daily Bollinger band and has dropped to the daily ascending support line commenced on the 20th June and that had been supportive until August.  
• The move comes on the back of a rally in the pound due to positive progress that is being made towards Brexit. 

Earlier today, cable rallied from 1.2845 and made a high of 1.3015. Brexit noise, for one, has turned positive and the pound is now playing catch up with the moves that the euro has made vs the greenback.

The European Union’s chief Brexit negotiator Michel Barnier said the bloc was prepared to offer Britain an unprecedentedly close relationship after it quits the EU: “We are prepared to offer Britain a partnership such as there has never been with any other third country."

However, he said that it would not permit anything that weakened the body’s single market. Brexit Minister Raab also made comments, saying "a UK-EU deal is 'within our sights'. 

Watching for counter remarks in Brussels and EU members officials from those opposed to such leniency when it comes to the EU - we already heard from the German Foreign Ministry that has down played the hype by Tweeting that there are "No special rules for post-Brexit UK", and, "cohesion is top priority / EU won't diminish single market". 

EUR/GBP levels

EUR/GBP has moved back towards the three-month support line at 0.8937 but until it gets there and below it, analysts at Commerzbank say that the currency pair remains bid."Below .8937 lies the August 14 low at .8896 sit the .8855 early August low lie the 55- and 200-day moving averages at .8887 and .8828. Only unexpected failure at the .8828 level would push the July low at .8799 to the fore."