EUR/GBP rebound toward 0.9000 after EU and UK reach Brexit deal

• The European Union and the United Kingdom reached a trade deal.
• Pound retreats after the announcement, EUR/GBP rises to 0.9000.

The EUR/GBP pair rose from three-week lows around 0.8950 to 0.9007, trimming daily losses after the announcement that the United Kingdom reached a deal with the European Union after months and months of talks.

The pound so far did not rally and pulled back, probably on a “buy the rumor, sell the fact” event. Now the UK Parliament and European nations have to ratify the deal. UK PM Johnson said there will be a vote on the EU trade deal on December 30.

Markets are about to end the week relatively quiet even after the Brexit story. The pound is still among the top performers but off highs. So far, the announcement did not trigger more gains. Monday’s opening could include gaps.

From a technical perspective, EUR/GBP bias is downward, particularly if it holds under 0.9000. Earlier during the week, the pair reached levels above 0.9200 before reversing sharply. A decline below 0.8940 would expose the critical barrier at 0.8860 that capped the downside in September and November.

Technical levels