EUR/GBP: Pressured around 0.8600 despite Brexit, coronavirus fears

EUR/GBP fails to extend the previous two week’s recovery moves, down for the first time in three days, amid Monday’s Asian session. That said, the cross-currency pair eases to 0.8594, down 0.05%, by the press time.

In doing so, the quote ignores downbeat headlines concerning the Brexit and the coronavirus (COVID-19) for the UK amid a sluggish session with a mildly bid risk appetite.

The European Union (EU) and the UK remain at loggerheads over the Brexit, despite agreeing to overcome the sausage war. The latest news from the BBC suggesting the Irish Prime Minister (Taoiseach) efforts to tame the unionist moves could escalate the Brexit woes. “Micheál Martin was responding to an accusation by DUP leader-designate Sir Jeffrey Donaldson that the Irish government was "cheerleading" for the protocol,” said the BBC.

On a different page, UK Health Secretary Health Minister Matt Hancock’s resignation, due to breaking the virus-led restrictions, framed by him. It’s worth noting that The Times’ news suggesting Germany’s push to ban British travellers should also have weighed on the GBP but did not. The Times said, “Germany will attempt today to ban British travellers from the EU regardless of whether or not they have had a vaccine.”

Elsewhere, market sentiment remains mildly bid with S&P 500 Futures up 0.07% and the US 10-year Treasury yields down 1.2 basis points (bps) by the press time.

Moving on, a light calendar and thin macros may keep the EUR/GBP pullback intact. However, the British traders’ reaction to the negative news may recall buyers.

Technical analysis

Unless crossing a downward sloping trend line from early May around 0.8615, not to forget the 100-day SMA near 0.8625, EUR/GBP remains on the bears’ radar.