EUR/GBP recovers further from weekly lows, moves closer to mid-0.9000s

• EUR/GBP staged a goodish intraday bounce from weekly lows, around the 0.9000 mark.
• The sterling witnessed some profit-taking as investors await updates on Brexit negotiations.

The EUR/GBP cross rallied around 40 pips from the early European session lows and refreshed daily tops, around the 0.9040-45 region in the last hour, albeit lacked any strong follow-through.

The cross managed to find decent support near the key 0.9000 psychological mark and staged a goodish intraday bounce from weekly tops amid the emergence of some heavy selling around the British pound. As investors looked past Wednesday’s hotter-than-expected UK consumer inflation figures, the sterling witnessed some profit-taking as investors eagerly awaited updates on the latest round of Brexit negotiations.

Weaker GBP prompted some short-covering move and assisted the EUR/GBP cross to recover a major part of the previous day’s intraday losses. Apart from this, some repositioning trade ahead of Wednesday’s release of the latest FOMC meeting minutes led to a modest USD rebound. This, in turn, led to some weakness around the EUR/USD pair as well, which might keep a lid on any strong gains for the cross, at least for the time being.

From a technical perspective, the EUR/GBP cross has been oscillating in a range since the beginning of this month, warranting some caution for aggressive traders. Hence, it will be prudent to wait for a sustained break in either direction before traders start positioning for the near-term trajectory.

Technical levels to watch