EUR/GBP being pushed and pulled between Brexit and covid headlines

• EUR/GBP stablising and in the hands of a barrage of noise from covid and Brexit.
• Bears seeking a break of recent support to 0.9070.

At the time of writing, EUR/GBP is trading at 0.9103 and has travelled between a low of 0.9083 and 0.9157 while being pushed and pulled by the covid and Brexit wires. 

The latest on the Brexit progress is that a deal is most probably not going to happen before Xmas. However, diplomats say they're not ruling out a deal by Christmas Eve.

Michel Barnier said there had been significant progress.

Member states expect to convene a meeting of the Working Party (of Brexit coordinators) every day (except Christmas Day).

Despite the cautious optimism that a deal can be done, fisheries remains a major problem.

As for covid, the UK is in the throes of a national lockdown as of Boxing Day. Markets are waiting for such announcements. 

Fears that a new variant of the novel coronavirus is behind a rise in infections in London and parts of southeast England has caused many countries around the world to suspend travel to and from the Kingdom.

"There is no evidence the variant causes more severe illness or higher mortality, but it does appear to be passed on significantly more easily," UK PM Boris Johnson said.

 "Although there is considerable uncertainty, it may be up to 70% more transmissible than the old variant," Johnson added, citing an early analysis from NERVTAG, the advisory group on New and Emerging Respiratory Virus Threats.

EUR/GBP technical analysis

While predicting currency moves can be futile, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe,”
― Abraham Lincoln.

The current market conditions are not very conducive to technical analysis when it comes to this particular cross this week. 

We have thin liquidity and a constant barrage of Brexit headlines into the 11th hour. 

There are gaps all over the daily chart but a break below what would otherwise stack up to be a triple bottom support opens low volumes into 0.9070.

On the hourly chart, a 38.2% Fibo retracement meets the prior resistance structure and a subsequent -0.272% Fibo of the correction would meet prior support.