EUR/GBP clings to gains below 0.9100 mark, focus remains on ECB decision

The EUR/GBP cross traded with a positive bias through the early European session, with bulls making a fresh attempt to build on the momentum beyond the 0.9100 mark.

Following the previous day's intraday pullback from six-week tops, the cross managed to regain some positive traction on Thursday and was being supported by a modest uptick in the shared currency. Bloomberg News reported on Wednesday that ECB officials are growing more confident in the region's economic outlook, which provided a goodish boost to the euro.

On the other hand, the British pound failed to capitalize on the overnight short-covering move amid worries about Brexit trade negotiations. It is worth recalling that Britain unveiled the so-called internal market bill on Wednesday, which acknowledged that some powers conferred by the legislation might be inconsistent with international law.

The legislation drew wide criticism and increased the possibility of a no-deal Brexit at the end of the transition period. This, in turn, held the GBP bulls on the defensive and remained supportive of the positive tone surrounding the EUR/GBP cross. Bullish traders, however, seemed reluctant to place aggressive bets ahead of the ECB decision on Thursday.

The European Central Bank is widely expected to leave its monetary policy settings unchanged at the end of its September policy meeting. Hence, investors will closely monitor any comments on the euro's recent appreciation and the ECB's new economic projections, which will play a key role in driving the shared currency in the near-term.

Apart from this, the incoming Brexit-related headline might continue to influence the sentiment surrounding the sterling. The combination of actors should assist investors to determine the next leg of a directional move for the EUR/GBP cross.

Technical levels to watch