- EUR/GBP witnessed some fresh selling on Friday and reversed the overnight positive move.
- Not so positive Brexit developments raised hopes for an extension of the transition period.
- Dovish ECB expectations weighed on the euro and further contributed to the selling bias.
The EUR/GBP cross witnessed some selling during the first half of the European trading session and dropped to fresh daily lows, around the 0.8925 region in the last hour.
Following an early uptick to the 0.8960 region, the cross met with some fresh supply on the last trading day of the week and has eroded a major part of the previous day's positive move. The British pound was supported by hopes for an extension to the Brexit transition period and got an additional boost following the release of stronger-than-expected UK retail sales figures.
It is worth recalling that Brexit talks were suspended on Thursday after a member of the EU team was tested positive for COVID-19. That said, the EU negotiating team briefed envoys of the 27 member states that Brexit talks remain unresolved on three main issues – level playing field, fisheries and state-aid rules – though did little to prompt any selling around the sterling.
On the other hand, the shared currency remained a relative underperformer amid expectations that the European Central Bank will announce additional monetary stimulus in December. This, in turn, contributed to the EUR/GBP pair's intraday slide, which marks the third day of a negative move in the previous five.
It will now be interesting to see if the EUR/GBP cross can find any support at lower levels or breaks through the 0.8900 round-figure mark, setting the stage for a further near-term depreciating move. Nevertheless, the incoming Brexit-related headlines will continue to play a key role in influencing the pair’s near-term momentum.
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 holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold clings to strong daily gains above $2,380
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.