GBP keeps outperforming EUR as the market feels the taste of Brexit deal in the air. There are still some issues related to Irish border, confirmed by UK spokesman James Black. His confirmation that the actual deal has yet to be done sent GBP/USD lower during the day to 1.3060 area. However, many investors are unwilling to send the pound lower, as there is the feeling that the UK gets closer to the deal.
Besides, this week brings some important reports from the UK starting with trade balance, industrial production and ending with monthly GDP report. Any positive numbers may give a much needed support to the British currency.
Meanwhile, sterling looks much stronger in cross with euro where current pressure from Italian budget outweighs the long-term problems of Brexit negotiations. Despite the hopes the local watchdog agency may dismiss the current deficit proposal, market still feels that Italian government will stick to it putting under pressure the local fixed income market.
In these circumstances EUR/GBP has all the chances to continue its slide down with the nearest target at 0.8730 followed by strong support level around 0.87.