- Euro bounces off 0.8675 lows and breaks back above 0.8700.
- The pound loses steam after having risen after the resignation of Truss.
- EUR/GBP remains neutral while below 0.8750.
The euro is paring losses and the British pound is pulling back from session highs as the dust settles over the resignation of British Prime Minister Liz Truss. The pair found support at 0.8675 to hit 0.8715 at the time of writing.
Prime Minister Truss’ withdrawal boosts the pound
The market welcomed the announcement of Prime Minister Liz Truss’s resignation earlier today, sending the pound soaring against its major peers and sending global equities to session highs.
However, the pound’s recovery has been short-lived. The ongoing political uncertainty in the UK, with the Tory leadership election due next week, is keeping sterling bulls at bay.
Additionally, the market has dampened hopes of an aggressive rate hike from the Bank of England at the Monetary Policy Committee meeting in November. BoE member Broadbent said on Thursday the bank will respond to Britain’s tax and spending policies, but gave no further information on the next monetary policy decision.
EUR/GBP: In a consolidating mood while below 0.8750
From a long-term perspective, the pair continues to trade sideways within recent ranges. To the upside, the pair should break above 0.8750, where the 100 and 200 SMAs meet on the 4-hour chart, before targeting 12 Oct high at 0.8865.
On the downside, immediate support lies at 0.8675 (Oct 19 low). Below, next potential targets could be at 0.8565 (Sep 6 low) and 0.8390/00 (Aug 8, 17, 24 lows).
Technical levels to watch
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
