EUR/GBP ended its two-day losing streak but might trade directionless as Brexit no-deal fears and ECB dovishness plus dollar recovery weighed on bullish and bearish bets.
EUR/GBP attracted buyers throughout the early European session and moved above mid-0.8900s later in the day.
The recent rejection from the 0.9000 psychological mark seems to have run its course for now as the pair bounced back from the weekly lows around 0.8915 – touched yesterday.
The surging hopes for a Brexit deal were cut short as reports suggest that the European Union leaders will ask the European Commission to publish no-deal plans. The news triggered a fresh wave of pound selling and helped EUR/GBP to move higher.
The pound weakness was offset by the EUR decline on account of the dollar short-covering. The common currency was also affected by the expectations of further monetary easing from the European Central Bank.
Traders might not take aggressive directional bets in the cross until clarity emerges on the Brexit deal talks. The Brexit deal negotiators will update the EU member states on Friday regarding the progress of the conversation with their British counterparts.
The UK and Eurozone have a light economic docket ahead today; hence EUR/GBP cross will trade in response to the Brexit related developments. Unless the pair clears the resistance near the 0.9000 area, bulls might take a cautious stance.
At the time of writing, one Euro buys 0.8936 British Pounds, up 0.10% as of 11:23 AM UTC.