- The euro under pressure due to the gas crisis and the economic outlook.
- EUR/GBP falls again to test the 200-day moving average.
The EUR/GBP is falling sharply on Tuesday and is racking up three consecutive lows. It is trading around 0.8441, the lowest in almost two weeks. The sharp pullback came from levels near 0.8600, which it reached last week.
The falls picked up pace on Tuesday in the face of a general weakening of the euro. The common currency is affected by the gas crisis. The European Union agreed to reduce gas consumption, to avoid major supply problems in the winter. This occurs in the face of reduced Russian gas flows through the Nord Stream 1 pipeline.
Sovereign bond yields are falling across the world. The German 10-year is at 0.91%, the lowest since May. For its part, the United Kingdom yields 1.88%, also the lowest since the end of May.
In the United Kingdom, there will be no impact economic data this week. The race for the succession of Boris Johnson yesterday had the first television underdog between Rishi Sunak and Liz Truss.
Technically the bias is negative on the EUR/GBP. The cross is testing the 200 day moving average. A close below 0.8430 would point to more downside. Next support can be seen at 0.8400 and then 0.83754.
If it manages to hold above 0.8440, the euro could recover some of the lost ground. The first resistance appears at 0.8480, followed by 0.8520 (20-day moving average).
Technical levels
Source: Fx Street
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