* U.S. set to announce a new round of tariffs on Chinese goods
* Euro supported by improving technical picture (Recasts throughout, adds comments, updates market action)
By Saqib Iqbal Ahmed
NEW YORK, Sept 17 (Reuters) - Sterling and the euro advanced against the U.S. dollar on Monday, amid optimism that Britain would reach a deal with the European Union on the terms of its departure from the bloc.
Talks between the European Union and Britain on Brexit are being conducted in a spirit of "good cooperation," Michel Barnier, the EU's chief negotiator on the issue, said on Monday.
Britain is due to leave the EU on March 29, 2019 but no full exit agreement has been reached.
Reports of progress on the key Irish border question helped boost the British pound.
The euro was 0.52 percent higher against the dollar at $1.1689. Sterling was 0.74 percent higher against the greenback.
"Clearly the market is getting a little excited about the EU summit later in the week and the potential for a sterling-favorable resolution there," said Brad Bechtel, managing director FX at Jefferies, in New York.
The first of three summits on the terms of Brexit will be held this week, and EU leaders hope a deal can be struck by November. The talks could determine how orderly Britain's withdrawal will be and what kind of economic impact it and its neighbors face.
Signs that Britain and the EU can agree and approve a proper divorce arrangement before it leaves, is generally positive for the outlook for both Sterling and euro, analysts said.
The euro was also supported by an improving technical picture, said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, referring to the common currency breaking above its 100-day moving average last week.
"The underlying sentiment has brightened a bit, at least for the short term, for the euro, from a technical basis," said Manimbo.
A mild recovery in emerging market currencies during U.S. trading hours on Monday was also exerting some pressure on the dollar, Jefferies' Bechtel said.
MSCI’s emerging market currency index down 0.22 percent, after falling by as much as 0.4 percent, earlier in the day.
The dollar, which has benefited from safe-haven flows as the Sino-U.S. trade conflict worsened, was on the defensive.
The United States is ready to negotiate a trade deal with China whenever Beijing is prepared for serious talks that will reduce tariffs and eliminate non-tariff trade barriers, top White House economic adviser Larry Kudlow said.
Administration officials said on Saturday that President Donald Trump was likely to announce the new tariffs on about $200 billion of Chinese imports as early as Monday.
Investors seem inclined to lock in dollar gains made since the spring ahead of next week when the Federal Reserve meets and is expected to raise interest rates for the third time this year, said Manimbo.
Reporting by Saqib Iqbal Ahmed Editing by Susan Thomas and Alistair Bell