- EUR / GBP is witnessing strong selling on Wednesday amid a strong recovery in demand for the British pound.
- Brexit-related news continues to influence sentiment around GBP.
- A modest rally in the common currency does little to offer support or ease the intraday selling bias.
The crossing EUR/GBP has fallen sharply during the European session on Wednesday, reaching about daily lows near the 0.9065 level. At the time of writing, the cross remains negative on the day and with bearish pressure intact around the 0.9070 region.
Following a brief consolidation during the Asian session on Wednesday, the crossover has seen some aggressive selling amid strong rebound in demand for the British pound. The Brexit-related news has raised good prospects for the resumption of Brexit talks, which, in turn, has led investors to undo their bearish positions on the GBP.
The EU’s chief Brexit negotiator, Michel Barnier, has said that a Brexit agreement is within reach and has shown his willingness to discuss all issues based on the legal text. Barnier has also said that a level playing field remains a key concern and that there will be no trade deal without a fair solution for fisheries.
On the other hand, the vice-president for interinstitutional relations of the EU, Maroš Šefčovič, has said that there is no time to lose and that the objective remains to reach an agreement. Meanwhile, the government spokesman has confirmed that there will be more Brexit talks later this Wednesday, which will continue to influence sentiment around the British pound.
On the other hand, the common currency has been supported by the prevailing sell bias around the US dollar, fueled by the latest optimism about additional US fiscal stimulus measures. However, the EUR / GBP cross has not achieved any respite, with GBP price dynamics proving to be the sole driver of intraday momentum.
The EUR / GBP cross appears to have broken four consecutive days of winning streak and has returned the gains recorded during the last two days. With that said, it will still be prudent to wait for some solid continuation selling before confirming that the cross could have hit a top and positioning itself for any further bearish moves.
Credits: Forex Street
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