EUR/GBP clings to gains near daily tops, still below mid-0.8900s

• EUR/GBP attract some dip-buying on Wednesday near 23.6% Fibo. level support.
• The EU Commission was reported to propose €750 billion in virus recovery fund.
• The uptick lacked any strong follow-through amid a modest pickup in the sterling.

The shared currency caught some fresh bids in the last hour and lifted the EUR/GBP cross to daily tops, around the 0.8935 region.

The cross stalled its recent pullback from the key 0.9000 psychological mark and managed to attract some dip-buying near the 23.6% Fibonacci level of the 0.9500-0.8671 fall, around the 0.8880-75 region. The cross reversed the previous day's fall to over one-week lows and was being supported by the British pound's relative underperformance against its European counterpart.

Meanwhile, the latest leg of a sudden spike over the past hour or so was triggered by reports that the EU Commission will propose €750 billion for the coronavirus recovery fund. The Deutsche Presse-Agentur GmbH (DPA), citing people familiar with the matter, further reported that €500 billion will be in grants and €250 billion will be in loans.

On the other hand, the overnight reports that the EU is willing to drop its ‘maximalist’ approach on fisheries in the next round of Brexit negotiations with the UK helped limit the early weakness around the sterling. This, in turn, kept a lid on any further gains for the EUR/GBP cross, at least for now.

There isn't any major market-moving economic data due for release on Wednesday, either from the Eurozone or the UK. Hence, it will be prudent to wait for some strong follow-through buying before traders again start positioning for the resumption of the pair's recent positive move.

Technical levels to watch

EUR/GBP