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  • EUR/GBP gained follow-through traction for the second consecutive session on Wednesday.
  • Not so optimistic Brexit headlines took its toll on the British pound and remained supportive.

The EUR/GBP cross reversed an early European session dip to sub-0.8900 level and shot to fresh weekly tops, around the 0.8925-30 region in the last hour.

The cross gained some positive traction for the second consecutive session on Wednesday and built on this week’s modest recovery from the vicinity of monthly lows support near the 0.8865-60 region. The British pound’s relative underperformance against its European counterpart could be attributed to Brexit anxieties amid the lack of progress in key sticking points.

Meanwhile, the latest leg of a sudden spike over the past hour or so came after the European Commission president Ursula von der Leyen warned that a Brexit deal is still far from certain. Von der Leyen said the disagreement over access to Britain’s fishing waters continues to block progress, which, in turn, was seen as a key factor that took its toll on the sterling.

On the other hand, the prevalent selling bias surrounding the US dollar extended some support to the shared currency. This was also cited as another factor driving the EUR/GBP cross higher through the first half of the trading action on Wednesday amid absent relevant market-moving economic releases, either from the Eurozone or the UK.

Hence, the incoming Brexit-related headlines will continue to play a key role in influencing the GBP price dynamics and produce some meaningful trading opportunities around the EUR/GBP cross. That said, it remains to be seen if the cross is able to capitalize on the attempted recovery move or meets with some fresh supply at higher levels.

Technical levels to watch

 

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