EUR/USD edges lower but GBP/USD slumps as Brexit news spooks investors

Brexit news has driven GBP/USD into reverse, while EUR/USD is struggling and USD/JPY has returned to its recent highs.

EUR/USD struggles in early trading

EUR/USD's limited bounce yesterday has stalled below $1.116, and further losses this morning suggest a test of $1.111 could be in the offing.

Below this, the price heads towards the 50-day simple moving average (SMA) at $1.1077, and then down towards $1.105 and trendline support from the September low. A rebound above $1.116 would provide a more bullish view and would target Thursday’s peak at $1.12.

GBP/USD slumps on Brexit news

The news that the UK government will stick to its end-2020 deadline for a new EU deal has not gone down well, with GBP/USD reversing its entire election night bounce.

The pair has now closed Thursday night’s gap up, and is now targeting the $1.31 area as support. A recovery above $1.32 might see some buying pressure develop, and for now the uptrend of the past month is still intact. A bigger retracement towards $1.28 would also still leave the post-August uptrend intact as well.

USD/JPY back to Y109.50

USD/JPY has tiptoed above ¥109.60, but a real push through ¥109.75 still eludes it.

However, there is little sign of bearish momentum, and with the 50-day SMA crossing above the 200-day SMA for the first time since July 2018, a more bullish view is emerging. Further gains head towards ¥110.35, horizontal and trendline resistance.

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