- The pound weakens on all fronts and extends its decline.
- BoE Governor’s comments do not help the British currency.
- EUR/GBP continues the rebound that started last week from levels below 0.8300.
EUR/GBP is trading at 1-week highs in the 0.8385 area, on a combination of factors. The pound is under pressure after comments from the head of the British central bank, and the euro is showing some strength.
Euro still in bullish mode
After trading below 0.8300 last week, the EUR/GBP started to rise. Friday’s bearish correction ended on Monday after the 0.8320 zone contained the lows.
To the rise at the start of the week picked up more momentum in the last hour, pushing EUR/GBP up to 0.8385, the maximum in a week, due to several factors.
The Governor of the Bank of England, Andrew Bailey participated in an event where recent macroeconomic events were discussed. He stated that variations in commodity prices represent a risk for the resilience of the market. He also warned that there are signs of a slowdown in growth.
After Bailey’s words, the pound extended the weakness in the market. Negative momentum was given another boost after the deterioration in equity markets. Major European indices trimmed gains in the last hour and Wall Street futures turned negative.
GBP/USD’s drop below 1.3100 mirrored and added intensity to the pound’s decline across the market.
Technical levels
Source: Fx Street
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