EUR/GBP extends Tuesday’s recovery from sub-0.8900 level

The EUR/GBP cross maintained bid tone for the second straight session and extended its recovery momentum from sub-0.8900 level.

Currently trading around 0.8960 region, Tuesday's sharp slide in the GBP/USD major, led by renewed 'hard Brexit' concerns, triggered the initial leg of recovery for the cross on Tuesday. Adding to this, a bid tone around the shared currency, with the EUR/USD pair managing to move back above 1.0900 handle, assisted the cross to extend its recovery momentum on Wednesday.

In absence of any major market moving economic releases either from Euro-zone or from UK, the cross would continue taking cues from broader market sentiment surrounding the EUR/USD and the GBP/USD majors, which remain dependent on the US Dollar price dynamics and expectations over the timing of next Fed rate-hike action. 

Technical levels to watch

A follow through buying interest above 0.8980 (yesterday's high) should lift the cross beyond 0.9000 psychological mark towards its next resistance near 0.9020-25 area. On the downside, 0.8930 level (near session low) now becomes immediate support, which if broken seems to drag the cross back towards sub-0.8900 support, near 0.8890-85 zone.