- EUR / GBP witnessed an intraday turnaround amid a sudden spike in demand for the British pound.
- GBP bulls seemed unaffected by the not-so-bullish incoming Brexit-related headlines.
The crossing EUR/GBP It fell around 80-85 pips from the swinging highs of the European session and the updated daily lows, near the 0.9070 region in the last hour.
The cross built on the good bounce the day before from the 0.9045 region and gained some traction during the first half of trading action on Tuesday. The momentum helped the EUR / GBP cross fill the weekly bearish gap, although it quickly exhausted near 0.9150.
The strong intraday decline was exclusively sponsored by the appearance of new purchases around the British pound. Despite not-so-optimistic developments, investors remained optimistic about the possibility of a last-minute Brexit deal before the end of the transition period on December 31.
It is worth reporting that the UK and the EU have repeatedly failed to narrow their differences on key issues. In addition, the EU’s main Brexit negotiator Michel Barnier reiterated on Monday that there has been limited progress on two sticking points: enforcement mechanisms and state aid.
GBP bulls even ignored the latest comments from the British prime minister’s spokesman, saying that a no-deal Brexit remains the most likely outcome. The UK wants a free trade deal with the EU, but not at any cost, the spokesperson added, although it did little to support the EUR / GBP cross.
On the other hand, the shared currency continued its struggle to take advantage of the positive post-ECB move and witnessed some selling. This, coupled with some technical selling below 0.9100, appeared to have further compounded the selling pressure around the EUR / GBP cross.
However, it remains to be seen if the pullback marks the end of the recent strong bullish move or if the EUR / GBP cross can attract some buying at lower levels. Therefore, it will be prudent to wait for some subsequent selling before positioning yourself for any further depreciation movements.
Technical levels
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