- A combination of factors assisted EUR/GBP to regain positive traction on Tuesday.
- The lack of progress in Brexit trade negotiations kept the GBP bulls on the defensive.
- A modest USD pullback contributed to the euro’s outperformance against the pound.
The EUR/GBP cross maintained its bid tone through the mid-European session and refresh daily tops, around the 0.9135 region in the last hour.
Following the previous day’s sharp pullback from the 0.9215 region, the cross managed to regain positive traction on Tuesday and was supported by some selling around the British pound. The lack of progress on fisheries – a key sticking point in the post-Brexit trade negotiations – kept the GBP bulls on the defensive.
It is worth recalling that British Prime Minister Boris Johnson on Monday warned that there are still problems in securing a post-Brexit trade deal. In the latest development, Johnson and European Commission President Ursula von der Leyen reportedly held a phone call in an attempt to strike a compromise on fisheries.
On the other hand, a modest bounce in the equity markets failed to assist the safe-haven USD to preserve its intraday gains and pushed the EUR/USD pair back closer to the recent swing highs. This was further cited as another factor behind the shared currency’s relative outperformance against its British counterpart.
It, however, remains to be seen if the EUR/GBP cross is able to capitalize on the move or continues with its struggle to find acceptance at higher levels. This makes it prudent to wait for some follow-through buying beyond mid-0.9100s before traders start positioning for any further intraday appreciating move for the cross.
Technical levels to watch
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