- EUR/GBP edged higher for the fifth consecutive session on Wednesday.
- Bulls might need to wait for a sustained move beyond the 0.9220 area.
- The incoming Brexit headlines continue to influence the British pound.
The EUR/GBP cross held on to its modest gains through the first half of the European trading action and was last seen trading just above the 0.9200 round-figure mark.
The cross once again struggled to capitalize on its move beyond the mentioned level and witnessed a modest intraday pullback from the 0.9215-20 region. The British pound got a minor lift after the EU’s chief Brexit negotiator, Michel Barnier said that we remain determined to strike a Brexit deal.
Barnier will be in London for informal talks until Friday and the optimistic remarks turned out to be a key factor that kept a lid on any meaningful gains for the EUR/GBP cross. However, growing market fears about a second lockdown in the UK held the GBP bulls from placing any aggressive bets.
It is worth recalling that Britain’s Prime Minister Boris Johnson announced new rules to curb the rise in coronavirus cases and warned to introduce greater restrictions if this does not work. This coupled with the disappointing release of the UK Services PMI helped limit the downside for the EUR/GBP cross.
Apart from this, a modest pickup in the shared currency further extended some support to the EUR/GBP cross. The shared currency seemed rather unaffected by mixed Eurozone PMI prints for September, instead took cues from some USD profit-taking on the back of the prevalent upbeat market mood.
Bulls, however, are likely to wait for some follow-through buying beyond the 0.9220 area before positioning for any further appreciating move. The EUR/GBP cross might then build on the momentum, marking its fifth consecutive day of a positive move, and climb further towards the 0.9060 area.
Technical levels to watch
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