EUR/GBP turns positive above 0.8970 on Draghi remarks

• ECB President Draghi's relatively hawkish comments boost euro.
• UK's Raab dismisses talks of a second referendum.
• Brexit headlines continue to dominate GBP.

Following Friday's sharp upsurge, the EUR/GBP pair reversed its course during the European trading hours on Monday as the GBP started to gather strength on latest Brexit headlines. However, ECB President Draghi's hawkish remarks in the last hour boosted the shared currency and allowed the pair to retrace its daily losses. As of writing, the pair was up a couple of pips on the day at 0.8972.

Earlier today, commenting on the reports of the Labour Party calling for a snap election and a second referendum, British Brexit Secretary Raab said that Labour was speaking nonsense and there wouldn't be a second referendum. Regarding the EU officials' remarks, Raab argued that they shouldn't react to "any blip in the road by the EU."

Meanwhile, in his prepared introductory statement before the Committee on Economic and Monetary Affairs of the European Parliament, ECB President Mario Draghi stated that they were expecting a "vigorous pick-up" in the underlying inflation and added that the ECB was forecasting inflation excluding food and energy reaching 1.8% in 2020. Although Draghi reiterated that policy rate was expected to remain at its present level at least through the summer of 2019, markets reacted positively to help the euro record solid gains against its rivals. In fact, the EUR/USD pair advanced to its highest level in more than three months above 1.18.

Technical levels to consider

The initial support for the pair aligns at 0.8950 (50-DMA), 0.8890 (100-DMA) and 0.8845 (Sep. 20 low). On the upside, resistances align at 0.8995/0.9000 (Sep. 21 high/psychological level), 0.9050 (Sep. 5 high) and 0.9095 (Jun. 28 low).