- Euro gains momentum after the Jackson Hole symposium.
- The pound continues to be pressured by the weather in the markets, among other factors.
- EUR/GBP bullish as long as it remains above 0.8500.
EUR/GBP is rising for the second day in a row and is trading at the 0.8545/50 area, at a one-month high. The cross gained momentum after breaking above 0.8500, against a stronger euro.
If consolidating above 0.8500, EUR/GBP will maintain a short-term bullish bias, with the next resistance in the 0.8590 area. If it falls below 0.8500, a possible reversal to test 0.8415 would be expected.
The pound on Monday is among the weakest currencies in the G10. In the UK, Monday is a public holiday. The negative climate in equity markets particularly affects the British pound. In addition, political issues are added in the face of the succession of Boris Johnson.
The poor economic outlook provided by the Bank of England (BoE) is another factor that puts downward pressure on the pound. On the opposite side, the European Central Bank (ECB), according to the presentations at the Jackson Hole symposium, is on track for an aggressive hike at next week’s meeting. This has given support to the euro.
Both the Eurozone and the United Kingdom are facing an energy crisis with large increases in prices for families. This is a negative factor for both and poses great risks for the winter.
Technical levels
Source: Fx Street
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