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03 Feb 2020
2 min read

Brexit And EUR/USD Performance

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Written by OspreyFX News Team

*OspreyFX would like to state that traders should research extensively before following any information given hereby. Please read our Risk Disclosure for more information.

Brexit And EUR/USD Performance

  • Following Britain”s formal departure on the 31st January 2020, EUR/USD was affected.
  • The pair gained momentum in the demand zone around 1.1010

The common currency gained robust impetus during Friday’s session. This news comes amid the risk-off sentiment that has been dominating the markets across the board. USD demand has weakened over the last few days, but this ended the month within the positive territory against the Euro. The EUR/USD pair consolidates its price action above the 1.1000 handle.

Gains are being capped by the 1.1100 round-figure. A dynamic resistance has formed with a bullish trend line that was previously broken by the bears.

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1.1290 could be on the cards

It should be noted that a strong barrier was found around 1.1230.  The spot began to make a retrace at the end of December 2020, recovering from its mid-season losses overall. The current positive stance should extend in favor of the bulls. Once it manages to break above 1.1102 to rally towards the 1.1177 level, which should strengthen the current trend. However, once it manages to clear out such an area, the focus will shift towards the 1.1230 level. This comes ahead of a key hurdle around 1.1280. If the rally continues, the 1.1300 handle will be on the cards for buyers. In contrast, EUR/USD might lose steam once that level is tested.

Will the pair look forward to consolidating below 1.10?

On the flip side, the pair could start to make a pullback to fall towards the nearest support that lies around 1.1014. If it gives up in favor of the bears, the common currency could do a leg lower towards the 1.0946. Such a move could strengthen the bearish path for the mid-term, at least, due to its ongoing consolidation below the 200 SMA and a death crossover with the 50 SMA as well in the H4 chart. Technical oscillators are showing extreme readings, with the RSI indicator located at 71 (overbought), while Momentum is pointing heavily upwards, favoring the bulls.

*OspreyFX would like to state that traders should research extensively before following any information given hereby. Please read our Risk Disclosure for more information.