- EUR/GBP struggled to capitalize on the overnight bounce and remained confined in a range.
- The GBP bulls refrained from placing aggressive bets and helped limit losses for the EUR/GBP.
- Subdued price action around the shared currency failed to provide any meaningful impetus.
The EUR/GBP cross lacked any firm directional bias and seesawed between tepid gains/minor losses, around the 0.9060-80 region through the early European session.
The cross failed to capitalize on the previous day’s modest rebound from the vicinity of the 0.9050 region and remained confined in a range during the first half of the trading action on Tuesday. As investors looked past the recent Brexit-related developments, the British pound struggled to gain traction and helped limit the downside for the EUR/GBP cross.
It is worth recalling that the latest round of Brexit negotiations ended without any progress on the key sticking points related to fisheries and state aid. The UK Prime Minister Boris Johnson and the European Commission President Ursula von der Leyen agreed in a phone call on Saturday to step up negotiations on a post-Brexit deal to close significant gaps.
On the other hand, the shared currency was seen consolidating its overnight gains and failed to provide any meaningful impetus. This, in turn, could keep a lid on any meaningful upside for the EUR/GBP cross amid absent relevant market moving economic releases. The cross was last seen hovering near the top end of its daily range, around the 0.9080 area.
Market participants now look forward to the ECB President Christine Lagarde’s scheduled speech for some impetus. This, along with the incoming Brexit headlines will influence the GBP price dynamics and further contribute to produce some meaningful trading opportunities around the EUR/GBP cross.
Technical levels to watch
Any subsequent strength beyond the 0.9100 mark is likely to confront a stiff resistance near the 0.9120-25 region, which if cleared decisively will set the stage for a move back towards reclaiming the 0.9200 mark. On the flip side, the 0.9060 region now seems to protect the immediate downside, below which the EUR/GBP cross might turn vulnerable to slide further towards challenging the key 0.9000 psychological mark.
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