EUR/GBP recovers further from 3-week lows, retakes 0.9100 mark
- EUR/GBP gains some traction and recovers further from three-week lows.
- The GBP bulls turned cautious and wait for the final round of Brexit negotiations.
- A modest pickup in demand for the euro remained supportive of the uptick.
The EUR/GBP cross refreshed daily tops during the mid-European session, with bulls now looking to build on the momentum further beyond the 0.9100 mark.
Following an early dip to the 0.9060 region, the cross managed to attract some buying interest and built on the previous day's goodish rebound from the 0.9025 region, or three-week lows. The British pound's relative underperformance against its European counterpart could be attributed to cautiousness ahead of the ninth round of Brexit negotiations.
Reports suggest that both the sides remain optimistic that some kind of a deal will be struck ahead of the upcoming EU summit in mid-October. Investors, however, preferred to wait for fresh Brexit updates, which, in turn, prompted some short-covering move around the EUR/GBP cross. Hence, Thursday could be a critical day for the GBP traders.
The EU's chief Brexit negotiator Michel Barnier and his UK counterpart David Frost will update the press on the status of talks on Thursday. Given that this would be the final round of official negotiations, the outcome will be significant for the future EU-UK relationship and should play a key role in influencing the sterling.
The EUR/GBP pair's intraday uptick was further supported by the emergence of some buying around the shared currency, fueled by the ongoing USD pullback from two-month tops. Market participants now look forward to the prelim German consumer inflation figures for some meaningful trading opportunities amid absent relevant macro data from the UK.
Technical levels to watch