- EUR / GBP shows signs of life after steep retracement from highs in nearly two months.
- Strong support at 0.8530 slows the advance of the pound.
The EUR / GBP is rising on Tuesday, rebounding after falling at the start of the European session to 0.8531, the lowest level since July 16. The cross is trading at the highs of the day at 0.8553.
The advance of the euro against the pound represents for now, a modest correction after the sharp fall experienced by the EUR / GBP last week, when it went from highs in months, above 0.8660, to end the week near 0.8550.
The strong reversal implied a change in the short-term trend. The euro failed to assert itself above a key resistance, returning to the lows for the month and the 20- and 55-day moving average.
The Close support of the cross is at 0.8530 that protects the floor of this year around 0.8500, that if broken it would enable more casualties. It is a very strong barrier, which will need a great strength of the pound or a lot of depreciation of the euro to be broken. A return above 0.8610 in EUR / GBP would give the euro momentum again.
The weakness of the euro occurred before and after the meeting of the European Central Bank and in a context of lack of agreement between the European Union and the United Kingdom on the Northern Ireland protocol. However, economic data influencing monetary policy expectations appear to be having a greater influence on the EUR / GBP.
Technical levels
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