- The British pound loses momentum and retreats for the second day in a row.
- EUR / GBP points to a possible bottom near 0.8850.
The crossing EUR / GBP is up over a hundred pips from Wednesday’s low and is testing the 0.9000 zone. The strong rally has taken place amid a weaker sterling across the board. The EUR / GBP cross is having the highest daily gain in months.
Meanwhile he GBP / USD is trading at multi-day lows at 1.3130, the EUR / USD is testing daily highs. The divergence points to a weakening of the pound sterling and a correction after a significant rally.
EUR / GBP: The trend still points to the downside
The short term technical outlook shows EUR / GBP with a strong bullish tone. The next resistance above 0.9000 se and most 0.9025. The critical level could be seen around 0.9050/60, a zone of many key moving averages and a downtrend line from the September highs. A break above 0.9060 it would override the negative bias and signal that it has established a bottom at 0.8860.
On the other hand, a drop below 0.8970 it could ease the current upward pressure, favoring a consolidation at lower levels. The key support is the area of 0.8860 which limited the drop many times during 2020.
Credits: Forex Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
