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  • EUR/GBP witnessed an intraday turnaround from one-week tops set earlier this Tuesday.
  • The sterling got a goodish lift after BoE Governor downplayed speculations of negative rates.
  • Mixed Brexit-related headlines held the GBP bulls on the defensive and helped limit the slide.

The EUR/GBP cross had some good two-way price swings through the mid-European session and now seems to have stabilized in the neutral territory, around the 0.9175 region.

The cross built on its recent bounce from the 0.9080 region and shot to one-week tops, around the 0.9220 region during the first half of the trading action on Tuesday. The momentum quickly ran out of the steam after the BoE Governor Andrew Bailey downplayed expectations of negative interest rates.

This coupled with some positive Brexit-related headlines provided an additional boost to the British pound. Adding to this, an offered tone surrounding the shared currency, prompted some fresh selling and dragged the EUR/GBP cross to an intraday low level of 0.9144, albeit lacked any strong follow-through selling.

Meanwhile, the Brexit optimism turned out to be short-lived after Ireland’s foreign minister, Simon Coveney said that there is a growing sense that perhaps Britain doesn’t want a Brexit deal. Coveney further added that the UK government tactic is making complex talks even more difficult.

Separately, the UK Prime Minister Boris Johnson outlined new coronavirus restrictions for England. The rules weren’t that harsh to jeopardise the economy, though Johnson’s warning to introduce greater restrictions if this does not work took exerted some fresh pressure on the sterling.

The EUR/GBP cross quickly recovered around 30 pips from daily lows and was last seen hovering near the 0.9170-75 region. In the absence of any major market-moving economic releases, the incoming Brexit headlines will influence the pound and produce some short-term trading opportunities.

Technical levels to watch