- EUR / GBP regains some positive traction for the third day in a row on Thursday.
- Brexit anxiety weighs on the GBP and continues to support the pair’s rally.
- A modest pullback in the common currency limits any significant rise in the pair.
The crossing EUR/GBP moves with a slight positive bias during the European session on Thursday, staying close to the upper end of its daily range around the region of 0.8915-20.
Following the previous day’s pullback of around 40 pips, the cross has managed to regain some positive traction on Thursday, but lacks a strong continuation buy. The relatively underperformance of the British pound versus its European counterpart could only be attributed to anxiety around Brexit.
British Finance Minister Rishi Sunak said on Thursday that negotiations are still ongoing and that it remains hopeful that an agreement can be reached. In the absence of significant progress on key sticking points (level playing field, fishing rules and state aid), the comments have done little to impress GBP bulls.
Furthermore, it is worth remembering that the President of the European Commission, Ursula van der Leyden, warned Wednesday that the Brexit deal is far from secure, as disagreement over access to Britain’s fishing waters continues to block progress. Furthermore, the British Prime Minister, Boris Johnson reiterated that the UK’s position on fisheries has not changed.
Johnson further added that will not ask for additional time to negotiate the trade agreement with the European Union. With very little time left before the Brexit transition period ends on December 31, the deadlock has weighed on hopes of a last-minute Brexit deal and turned out to be a key factor holding back GBP bulls. open new positions.
Meanwhile, the emergence of new selling around the common currency has limited any significant bullish movement for the EUR / GBP cross. This, in turn, has made it prudent to wait for some solid continuation buying before confirming that the cross has bottomed out in the short term and positioning itself for any further recovery moves.
EUR / GBP technical levels
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