- EUR / GBP rises more than 70 pips from the low of the day.
- Trend is still bearish, but if the rebound is confirmed, consolidation would be expected.
EUR / GBP just hit highs for the day in 0.8614, after having fallen in the Asian session to 0.8537, the lowest in a year. The euro accelerated the rebound in European hours, rising in the market.
The main factor behind the rebound appears to be technical at the moment, along with profit taking. EUR / GBP has been down since February 11, with a slight pause at the close of last week.
Implications for the pound rally
The trend in favor of the pound remains intact. Although should the EUR / GBP rebound extend or hold above 0.8600, a consolidation ahead would be expected, with the possibility of a more significant correction to the upside. The rebound has weakened the short-term bearish moment. A return below 0.8560 would suggest a visit to the recent lows can be made.
According to analysts at Rabobank, the bullish moment of the pound has reached the EUR / GBP to its medium-term target of 0.87. They affirm that the movement may have more room to continue in the short term, but warn that it is with jumps and room for bounces in the spring before the price settles in the 0.85 zone later in the year.
Technical levels
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