- EUR GBP has seen a modest recovery from the lows of the European session and has returned to above 0.8750.
- The pair continues to trade within the ranges of a downtrend channel, which implies further losses in the coming weeks.
The EUR/GBP It has seen a modest recovery from the lows of the European session and is back above 0.8750, around which the pair has spent the last hours consolidating. As a reminder, a less dovish-than-expected tone at Thursday’s Bank of England meeting regarding the potential use of negative interest rates, the gradual reduction in asset purchases, and the outlook for the economy caused the pair to fall sharply. from around 0.8830 to current levels around 0.8850. Friday’s slight rebound appears to be nothing more than a positional adjustment / technical rebound.
Technical data remains very bearish for EUR / GBP
EUR / GBP continues to trade within the bands of a downtrend channel and found strong support at the lower end of this trend channel on Friday; When EUR / GBP fell below 0.8750 during the early European session on Friday, it hit the downtrend linking the lows of December 31, January 14, 20 and 21. From a technical point of view, it seems likely that EUR / GBP will now rally again towards 0.8800, a level around which there is strong resistance in the form of lows set earlier in the week and where it will also reach the upper limit of the downtrend channel. which links the descending highs since the end of January.
Overall, the technical outlook looks bearish as long as the pair continues to trade within this trending channel, which seems to fit in well with a bearish fundamental backdrop (a faster comparative vaccination campaign of the UK versus the EU alongside the prospect of the lockdown easing soon in the UK versus further tightening in the EU).
4 hour chart