EUR/GBP refreshes session lows, around 0.8565 region
- EUR/GBP once again met with some fresh supply just ahead of the 0.8600 round figure.
- COVID-19 jitters, Brexit woes might act as a headwind for the GBP and limit the downside.
The EUR/GBP cross edged lower through the mid-European session and dropped to fresh daily lows, around the 0.8570-65 region in the last hour.
The cross witnessed a modest pullback from the vicinity of the 0.8600 round-figure mark, or weekly tops and has now eroded a part of the previous day's positive move. The British pound's relative outperformance lacked any obvious fundamental catalyst and could be solely attributed to some repositioning trade ahead of Fed Chair Jerome Powell's speech.
That said, the worsening COVID-19 situation in the UK might act as a headwind for the sterling. It is worth mentioning that Britain has been reporting over 30K coronavirus cases over the past few days. Apart from this, Brexit woes should help limit deeper losses for the EUR/GBP cross, warranting some caution before positioning for any further depreciating move.
There isn't any major market-moving economic data due for release on Friday, either from the Eurozone or the UK. Powell's remarks at the Jackson Hole Symposium might infuse some volatility in the FX market and provide some short-term trading impetus to the EUR/GBP cross.
From a technical perspective, repeated failures near the 0.8590-95 region now seemed to constitute the formation of a bearish double-top. However, it will still be prudent to wait for sustained weakness below the 0.8550-40 horizontal zone before confirming that the EUR/GBP cross has topped out in the near term.
Technical levels to watch