- EUR/GBP struggled for a firm direction and remained confined in a range on Thursday.
- Signs of economic slowdown undermined the shared currency and capped the upside.
- A slight disappointment from German IFO Sentiment index failed to provide any impetus.
The EUR/GBP cross seesawed between tepid gains/minor losses through the early European session and was last seen trading in the neutral territory, just above mid-0.9100s.
Following the previous day's pullback of around 70-80 pips, the cross managed to regain some positive traction during the early part of the trading action on Thursday. The uptick, however, lacked any strong follow-through and ran out of the steam near the 0.9180 region.
The shared currency's relative outperformance against its British counterpart could be attributed to worries about the emerging signs of an economic slowdown in the Eurozone. The market concerns resurfaced following the release of the flash Markit PMI prints for September.
According to the data released on Wednesday, the economic recovery in the Eurozone took a hit in September amid the second wave of coronavirus infections. In fact, the gauge for the services sector fell into contraction territory, to 47.6 for September.
Adding to this, the headline German IFO Business Climate Index also fell short of market expectations and came in at 93.4 in September. Meanwhile, the Current Economic Assessment arrived at 89.2 points in the reported month as compared to last month's 87.9 and 89.5 anticipated.
On the other hand, the British pound struggled to gain any meaningful traction and was seen consolidating its recent losses as investors await Brexit updates before placing fresh directional bets. This, in turn, led to a subdued/range-bound price action around the EUR/GBP cross.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.