EUR/GBP spikes to multi-day tops, retakes 0.9100 mark and beyond
- EUR/GBP turns positive for the second consecutive session amid the incoming Brexit headlines.
- EU leaders will label progress in Brexit talks as 'not sufficient' for a deal and weighed on the GBP.
- A softer tone surrounding the shared currency capped the upside ahead of Lagarde’s speech.
The EUR/GBP cross finally broke out of its Asian session consolidation phase and surged past the 0.9100 mark, hitting multi-day tops in the last hour.
The cross built on the previous day's goodish rebound from over one-month lows, around the 0.9020 region and gained some strong follow-through traction for the second consecutive session on Wednesday. The momentum was exclusively sponsored by the emergence of some fresh selling around the British pound, triggered by the incoming negative Brexit-related headlines.
According to a draft summit decision seen by Reuters, European Union leaders – scheduled to meet in Brussels on Thursday and Friday to discuss Brexit – will say that progress in talks with Britain is "still not sufficient" to seal a new trade deal. The document also mentions that the EU will decide to step up contingency preparations for an abrupt economic split without a deal.
Apart from this, possibilities of some short-term trading stops being triggered above the 0.9080-85 horizontal resistance further contributed to the latest leg of a sudden spike over the past hour or so. However, a softer tone surrounding the shared currency kept a lid on any strong gains for the EUR/GBP cross amid absent relevant market-moving economic releases.
It will now be interesting to see if bulls are able to capitalize on the momentum or the EUR/GBP cross meets with some fresh supply at higher levels. Market participants now look forward to a scheduled speech by the ECB President Christina Lagarde, which might influence the common currency. This, along with incoming Brexit headlines will produce some meaningful trading opportunities.
Technical levels to watch