On Friday, a number of factors helped EUR/GBP regain some bullish momentum.
The pound was pulled down by COVID-19 worries, while the euro benefited from lower USD demand.
Before putting further wagers, bulls may need to wait for some follow-through buying.
In the last hour, the EUR/GBP cross rallied around 30 pips from daily swing lows and shot to the top end of its daily trading range, around 0.8555.
The EUR/GBP cross saw some selling throughout the early part of the European session, following the previous day’s good two-way price fluctuations. The early downtick, on the other hand, saw no follow-through selling and was swiftly purchased into near 0.8525.
Fears of a new COVID-19 outbreak in the UK proved to be one of the main reasons for the British pound’s underperformance against its European counterpart. The overnight hawkish comments by Bank of England policymaker Michael Saunders were overshadowed by this.
During a scheduled speech on Thursday, Saunders stated that the question of whether or not to reduce current asset purchases sooner will be discussed at upcoming meetings. The GBP bulls were unimpressed by this, since it suggested a probable shift in posture among rate-setters.
A subdued US dollar price action, on the other hand, provided some support for the shared currency. This was considered as just another element that boosted the EUR/GBP exchange rate. It remains to be seen whether bulls can profit from the rise or if they will be rejected at higher levels.
On Friday, no major market-moving economic data is scheduled to be released. This makes it even more advisable to hold off on positioning for a continuation of this week’s comeback from over three-month lows, around the 0.8500 psychological mark touched on Wednesday./n
