EUR/GBP jumps to fresh session tops, further beyond mid-0.8500s

The EUR/GBP cross caught aggressive bids during the early European session and shot to fresh daily tops, around the 0.8560-65 region in the last hour.

The cross once again found decent support and attracted some buying near the 0.8535 horizontal zone on the first day of a new trading week. The uptick assisted the EUR/GBP cross to stall last week's sharp retracement slide from the 0.8615-20 region, or three-week tops and recover a part of its heavy losses recorded on Friday.

Renewed Brexit concerns, along with COVID-19 woes acted as a headwind for the British pound and extended some support to the EUR/GBP cross. In fact, Brussels and London were locked in a dispute over the size of the UK’s Brexit bill. Adding to this, the UK last week reported the highest number of infections in over five months.

On the other hand, the shared currency found some support from a subdued US dollar price action. This, in turn, was seen as another factor that provided an additional boost to the EUR/GBP cross. It, however, remains to be seen if bulls are able to capitalize on the momentum or the cross meets with some fresh supply at higher levels.

There isn't any major market-moving economic data due for release on Monday, either from the Eurozone or the UK. This further makes it prudent to wait for some strong follow-through buying before confirming that the EUR/GBP cross has formed a strong base near the 0.8535 area and positioning for any further appreciating move.

Technical levels to watch