Search ForexCrunch
  • EUR/GBP attracted some dip-buying near the 0.9050 horizontal support.
  • Brexit uncertainties held the GBP bulls from placing any aggressive bets.
  • A goodish pickup in demand for the common currency remained supportive.

The EUR/GBP cross held on to its gains through the mid-European session and was last seen trading near the top end of its daily range, around the 0.9080-85 region.

The cross managed to find some support near mid-0.9000s, instead attracted some buying on the first day of a new trading week and recovered a part of the previous session’s losses. The British pound’s relative underperformance against its European counterpart could be solely attributed to persistent Brexit-related uncertainties.

It is worth reporting that the UK Prime Minister Boris Johnson and the European Commission President Ursula von der Leyen agreed in a phone call on Saturday to intensify Brexit talks to close significant gaps. The GBP bulls, however, seemed reluctant to place any aggressive bets and even shrugged off an upward revision of the UK Services PMI.

On the other hand, the shared currency benefitted from the emergence of some fresh selling around the US dollar. Positive news about the US President Donald Trump’s coronavirus infection boosted investors’ confidence and triggered a fresh leg up in the equity markets, which, in turn, undermined the greenback’s relative safe-haven demand.

The euro was further supported by an upward revision of the Eurozone Services PMI prints and less bad than expected Sentix Investor Confidence Index, which came in at -8.3 for October as compared to -9.5 expected and -8.0 previous.

It will now be interesting to see if the EUR/GBP cross is able to capitalize on the move or meets with some fresh supply at higher levels amid fresh jitters over the economic recovery in Europe amid the second wave of coronavirus infections. This makes it prudent to wait for some strong follow-through buying before positioning for any further gains.

Technical levels to watch