- EUR/GBP gained traction for the second straight session on the first day of the week.
- The lack of progress in Brexit talks weighed on the sterling and remained supportive.
The EUR/GBP cross edged higher through the early North American session and was last seen trading near two-day tops, around the 0.9030 region.
The cross built on the previous session’s goodish rebound from over one-month lows and gained some follow-through traction for the second consecutive session. The lack of progress in Brexit talks was seen as a key factor behind the British pound’s relative outperformance against its European counterpart and driving the EUR/GBP cross higher on the first day of the week.
It is worth recalling that the EU’s chief negotiator Michel Barnier said on Friday that the seventh round of Brexit talks failed to yield any breakthrough. Barnier’s UK counterpart, David Frost also mentioned about the deadlock and paved the way for weeks of uncertainty. This, in turn, took its toll on the sterling and remained supportive of the EUR/GBP pair’s ongoing positive move.
On the other hand, the shared currency remained well supported by the fact that that the European governments have taken decisive action to support economic growth. The intraday positive move took along some short-term trading stops placed near the key 0.9000 psychological mark. Hence, the uptick could further be attributed to some technical buying above the mentioned barrier.
It will now be interesting to see if bulls are able to capitalize on the move or opt to take some profits off the table. Market participants now look forward to this week’s key event risk, the Jackson Hole Symposium, where a scheduled speech by influential central banker will infuse some volatility and provide a fresh directional impetus to the EUR/GBP cross.
Technical levels to watch
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