- EUR/GBP gained traction for the second consecutive session on Friday.
- The euro benefitted from upbeat German/Eurozone Manufacturing PMIs.
- Brexit uncertainties undermined the sterling and remained supportive.
The EUR/GBP cross edged higher through the first half of the European session and climbed to two-day tops, around mid-0.9000s in the last hour.
Having shown some resilience near 100-day EMA, the cross managed to gain some positive traction for the second consecutive session on Friday. The British pound’s relative underperformance against its European counterpart could be attributed to persistent Brexit uncertainties.
Despite the resumption of Brexit talks, investors remain concerned about disagreements over fishing access and competition issues. The uncertainty held the GBP bulls from placing fresh bets and was seen as a key factor lending support to the EUR/GBP cross.
It is worth recalling the EU’s chief Brexit negotiator, Michel Barnier had warned on Wednesday that level playing field remains a fundamental concern and that there will be no trade deal without a fair solution for fisheries.
On the other hand, the common currency got a goodish lift from Friday’s upbeat German Manufacturing PMI, which jumped to a 30-month high level of 58.0 in October. Investors were anticipating the gauge to edge lower to 55.1 from 56.4 previous.
Adding to this, the Eurozone Manufacturing PMI also surpassed expectations and largely offset the disappointing releases of the German/Eurozone Services PMI prints. Meanwhile, the mixed UK PMIs did little to provide any meaningful boost to the sterling.
With Friday’s key PMI releases out of the way, it will now be interesting to see if the EUR/GBP cross is able to capitalize on the move or once again meets with some fresh supply at higher levels. Nevertheless, the focus will remain on the incoming Brexit headlines.
Technical levels to watch
Share
