EUR/GBP clings to gains near 0.8770, Brexit eyed

The initial softer tone around the British Pound is now helping EUR/GBP to stay in the positive territory ahead of the European opening on Monday.

EUR/GBP gains capped around 0.8780

The European cross is trading within a narrow range at the beginning of the week, with market participants staying cautious ahead of the start of the Brexit talks later in the session.

In addition, and apart from the Brexit negotiations, GBP should remain under pressure in light of a ‘potential terrorist attack’ in London and the unabated effervescence in the UK’s political scenario, with (still) PM Theresa May still in the centre of the debate. On the EUR-side, French President E.Macron secured the majority at the National Assembly following Sunday's second round of legislative elections, somewhat adding support to the risk-on trade and sentiment around the common currency.

Nothing scheduled data wise on both sides of the Channel today, with only speeches by ECB’s Lautenschlager and Nouy due later. Governor M.Carney is also expected to speak tomorrow morning.

EUR/GBP key levels

The cross is now up 0.13% at 0.8771 facing the next up barrier at 0.8810 (high Jun.15) followed by 0.8865 (2017 high Jun.9) and finally 0.9055 (high Nov.2 2016). On the downside, a drop below 0.8727 (20-day sma) would expose 0.8715 (low Jun.16) and then 0.8646 (low Jun.8).