EUR / GBP remains positive with downside attempts contained above 0.9000

• EUR / GBP is still slightly positive, supported above 0.9000.
• The announcement of the second lockdown in the UK weighs on the pound.
• On the bright side, hopes for a Brexit deal are underpinning GBP crossovers.

The euro found support at 0.8995 earlier on Monday, following a bearish reaction from intraday highs at 0.904. The pair has risen above 0.9000 again and is trading modestly higher on the daily charts.

A second UK lockdown hits the pound

The pound has been trading lower against its main rivals on Monday after British Prime Minister Boris Johnson announced the introduction of a second lockdown this weekend. The sharp increase in COVID-19 cases, with daily infections exceeding 20,000, has raised the alarm about the possibility of overcoming the worst-case scenario of 80,000 victims this winter.

Reports of the lockdown have increased negative pressure on the pound, which, however, remains underpinned by hopes for a trade deal with the European Union. The absence of news on Brexit, as both sides make the last effort to close a last-minute deal to avoid a hostile divorce, is preventing sterling from falling further.

On the macroeconomic front, the Eurozone Manufacturing PMI has shown its best reading in 27 months, albeit with a worryingly uneven expansion, with consumer goods producers feeling the impact of the pandemic, warning of a further slowdown as the impact of the locks starts.

The UK manufacturing PMI has presented a similar picture, with manufacturing activity revised up and production of consumer-oriented goods falling in contraction.

Technical levels