EUR/GBP testing bullish commitments at psychological 0.90 level

• EUR/GBP has crumbled from the Brexit and dollar weakness imposed highs to test bull's commitments at the psychological 0.90 level.
• Britain, becoming the world's first nation to approve the Pfizer-BioNTech COVID-19 vaccine, offers some solace to the pound.

EUR/GBP is trading at 0.9001 at the time of writing having penetrated the psychological number already, down to a low of 0.8999 after falling from 0.9068.

The cross is -0.64% as the euro struggles to gain ground vs the US dollar which is correcting from 2.5-year lows. 

The focus for the pound, fundamentally, lies with the progress of Brexit talks and  GBP is currently the most oversold currency in the G10 because of it. 

European Union negotiators have moved to "within millimetres" of the limits of their negotiating mandate at Brexit trade talks this week, a EU diplomat said on Thursday.

The diplomat said that it is up to London to compromise if a deal is to be reached.

However, Prime Minister Boris Johnson's government has moved forward with two bills that would breach the 2020 Brexit treaty despite protests from Brussels.

Overall, the Brexit negotiators are reportedly stuck on differences over fisheries, state aid for companies and rules to resolve disputes.

On the flip side, the pound can find some solace on the bases that Britain is becoming the world's first nation to approve the Pfizer-BioNTech COVID-19 vaccine.

From an economic standpoint, the vulnerability of the UK economy this year may imply that the country may benefit disproportionately on the back of a vaccine, analysts at Rabobank explained.

''Though this conclusion is dependent on many other factors,'' they said. 

''Despite the government’s huge fiscal effort, the depth of the downturns suggests that economy will suffer significantly from scarring in the next few years. Although the market has currently adopted a more positive outlook for the pound, it is not out of the woods yet.''