- The emergence of some fresh selling around the GBP provided a strong lift to EUR/GBP.
- Reports indicate that the EU will threaten legal action against Britain over breaches of the treaty.
- The ECB leaves interest rates unchanged and does little to provide any meaningful impetus.
The EUR/GBP cross finally broke out of its European session consolidation phase and shot to fresh six-week tops, around the 0.9135 region in the last hour.
The latest leg of a sudden spike over the past hour or so was led by the emergence of some fresh selling around the British pound. The Times reported the European Union will threaten legal action against Britain over breaches of the Brexit withdrawal treaty, which, in turn, took its toll on the sterling.
On the other hand, the shared currency remained well supported by the overnight report that the European Central Bank will adopt a more optimistic tone on its economic outlook. The bullish tone remained uninterrupted after the ECB announced its policy decision and left benchmark interest rates unchanged.
The decision was in line with market expectations and hence, did little to influence. Investors, however, will monitor any comments on the euro's recent appreciation and the ECB's new economic projections. This will be followed by the post-meeting press conference, where comments by the ECB President Christian Lagarde might provide some meaningful impetus.
Technical levels to watch
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