- EUR/GBP regained some positive traction on Tuesday, albeit lacked any strong follow-through.
- Brexit-related uncertainties undermined the sterling and remained supportive of the move up.
- The set-up warrants caution before placing directional bets amid absent economic releases.
The EUR/GBP cross edged higher through the early European session and was last seen hovering near the top end of its daily trading range, around the 0.9080-85 region.
Following the previous day’s good two-way price swings, the cross managed to regain some positive traction and was being supported by the shared currency’s relative outperformance against its British counterpart. Despite growing concerns about the continuous surge in new coronavirus cases, investors seemed reluctant to buy the US dollar ahead of the Nov. 3 US presidential election. This, in turn, provided a modest lift to the euro.
On the other hand, persistent Brexit-related uncertainties led to subdued price action around the sterling and further contributed to the EUR/GBP pair’s intraday positive move. It is worth reporting that the EU’s chief negotiator Michel Barnier expected to stay in the UK until Wednesday has boosted hopes for a last-minute Brexit deal. However, investors remain sceptic about a deal amid differences over the key sticking point of fisheries.
There isn’t any major market-moving economic data due for release on Tuesday. Hence, the incoming Brexit headlines will continue to play a key role in influencing the sterling and produce some meaningful trading opportunities around the EUR/GBP cross. Nevertheless, the cross, so far, has held within the overnight trading range, making it prudent to wait for a sustained move in either direction before placing any aggressive bets.
Technical levels to watch
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