EUR/GBP clings to modest intraday gains near 0.8600 mark, lacks follow-through
- EUR/GBP gained some positive traction on Monday and snapped three days of the losing streak.
- Brexit jitters acted as a headwind for the British pound and remained supportive of the move up.
- A modest USD strength, weaker German data weighed on the euro and capped gains for the cross.
The EUR/GBP cross refreshed daily tops during the early European session, albeit lacked any strong follow-through buying. The cross was last seen trading around the 0.8600 round-figure mark, up nearly 0.15% for the day.
Following an early dip to the 0.8575 area, the cross gained some positive traction on Monday and built on the previous session's modest bounce from over three-week lows. The uptick allowed the EUR/GBP cross to snap three consecutive days of the losing streak and was sponsored by the emergence of some selling around the British pound.
Ahead of Brexit talks on the Northern Ireland protocol later this week, the European Union's ambassador to the UK said on Sunday that the level of trust between the two powers was low. This indicated that Britain's relationship with the EU has been souring, which, in turn, was seen as a key factor that weighed on the sterling.
That said, the optimistic outlook for the UK economic recovery and indications that the Bank of England could raise rates well into next year acted as a tailwind for the GBP. The BoE policymaker Gertjan Vlieghe indicated recently that the central bank was likely to raise rates earlier if the economy rebounds more quickly than expected.
On the other hand, the shared currency was seen oscillating in a range amid a modest US dollar strength. Apart from this, weaker German Factory Orders data failed to provide any additional lift to the EUR/GBP cross. This makes it prudent to wait for some before placing fresh bullish bets heading into the ECB policy meeting on Thursday.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
