- The emergence of fresh selling around the British pound pushed EUR/GBP to one-week tops.
- EU-UK collision over Norther Ireland protocol, Brexit jitters weighed heavily on the sterling.
- A sustained move beyond a descending trend line will set the stage for additional gains.
The EUR/GBP cross caught some aggressive bids and shot to one-week tops, around the 0.8630 region in reaction to the latest Brexit headlines.
The British pound took a hit and weakened across the board after European Commission Vice President of Interinstitutional Relations and Foresight, Maroš Šefčovič, commented on the Northern Ireland protocol. The UK has to abide by the legal obligations on border controls and if it takes any unilateral action, the EU will react swiftly, said Šefčovič.
This comes on the back of speculations that the UK may delay plans to end restrictions fully on June 21 in light of the spread of the so-called Delta variant. The combination of factors weighed on the sterling, which, in turn, prompted some short-covering around the EUR/GBP cross and led to a strong intraday rally of around 45 pips.
On the other hand, the shared currency benefitted from the emergence of some fresh selling around the US dollar. This was seen as another factor that provided an additional boost to the EUR/GBP cross. Apart from this, the strong move up could further be attributed to some repositioning trade ahead of Thursday's ECB policy meeting.
From a technical perspective, the EUR/GBP cross was last seen flirting with a short-term descending trend-line resistance extending from April swing highs. A sustained move beyond will be seen as a fresh trigger for bullish traders and set the stage for an extension of the recent bounce from the 0.8565-60 strong horizontal support.
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 stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.