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EUR / GBP clings to modest recovery gains just below 0.9050

The crossing EUR/GBP has moved higher in the first half of the European session on Thursday, holding near daily highs just below the 0.9050 region.

The crossing has achieved attract some purchases at lower levels, just above the key psychological level of 0.9000, and has now recovered a portion of the previous day’s sharp drop of around 125 pips. It is worth remembering that prospects for the resumption of Brexit talks They provided a strong boost to the British pound on Wednesday and put heavy pressure on the EUR / GBP cross.

Meanwhile, the EU’s chief Brexit negotiator Michel Barnier warned on Wednesday that a level playing field remains a key concern and that there will be no trade deal without a fair solution for fisheries. It’s worth remembering that recent trade talks between the UK and the EU had stalled amid disagreements over access to fishing and skills issues.

Further, the imposition of new locks in some parts of the UK, to curb the second wave of coronavirus, has prevented GBP bulls from opening aggressive positions. This, in turn, has been seen as one of the key factors that has helped the EUR / GBP cross find some support near the 100-day EMA and regain positive traction on Thursday.

On the other hand, the common currency was being affected by a strong rebound in demand for USD. In the absence of major economic releases from either the eurozone or the UK, a softer tone around the common currency has limited strong gains for the EUR / GBP cross and warrants some caution before positioning for further gains.

Credits: Forex Street

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