- EUR / GBP gains some positive traction on Monday and breaks a three-day losing streak.
- Nervousness about Brexit acts as a headwind for the British pound and continues to support the bullish movement of the pair.
- A modest USD strength and weaker German data weigh on the euro and limit further gains from the EUR / GBP.
The crossing EUR/GBP moves slightly higher during the European session on Monday and seeks to stay above the 0.8600 level.
After an initial drop to the 0.8575 zone, the cross has gained some positive traction on Monday and has built on the modest rebound of the previous day from lows of more than three weeks. The rebound has allowed the crossing EUR / GBP broke three consecutive days of losing streak and it is due to the appearance of some sales around the British pound.
Prior to the Brexit talks on the Northern Ireland protocol At the end of this week, the European Union ambassador to the United Kingdom said on Sunday that the level of trust between the two powers was low. This indicates that Britain’s relationship with the EU has deteriorated, which, in turn, has been seen as a key factor weighing on the British pound.
Having said that, The optimistic outlook for the UK economic recovery and signs that the Bank of England could raise rates in the coming year have acted as a tailwind for the British pound.. Bank of England member Gertjan Vlieghe recently indicated that the central bank is likely to raise rates sooner if the economy recovers faster than expected.
On the other hand, the common currency is moving within a range amid a modest strength in the US dollar. Apart of this, the weakest data for German factory orders they have not provided any additional boost to the EUR / GBP cross. This makes it prudent to wait before opening new bullish positions. ahead of the ECB’s monetary policy meeting on Thursday.
EUR / GBP technical levels
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