EUR / GBP cuts losses although it remains below 0.8500

• The euro remains weak, capped below 0.8500.
• Expectations of a rate hike from the BoE have boosted the pound.
• EUR / GBP: A break of the 0.8449 support would increase bearish momentum – Commerzbank.

The EUR is recovering on Friday, after having depreciated for six consecutive days. The crossing EUR/GBPHowever, it remains on the defensive below 0.8500, close to the yearly lows of 0.8450.

The pound rises on the expectations of adjustment of the BoE

The British pound has shown strength against major currencies this week, fueled by market expectations that the Bank of England could be the first major central bank to raise interest rates after the COVID-19 crisis. The Bank of England could start raising interest early next year in an attempt to address inflationary pressures.

Bullish expectations from the Bank of England and the subdued appetite for risk observed this week appear to have offset market fears about a fuel shortage in the UK, which caused the pound to fall in the previous weeks. Against the euro, the pound has appreciated almost 2% after bottoming out at the end of September, while against the US dollar the pound has recovered 1.75% from the lows of the previous week.

EUR / GBP: breach of lows of 8.449 would expose target of 0.8239 – Commerzbank

From a technical perspective, Karen Jones, Head of the FICC Technical Analysis Research Team at Commerzbank, warns of a bearish move below 0.8449: “EUR / GBP is under short-term pressure after last week’s failure just before. of 0.8671, the high of July 2021. The market has reacted to the key support at 0.8471 / 49, the recent lows and lows since 2019. Again we look for these to maintain the low (…) “Below 0.8449 they would point to the low of 0.8239 in 2019 “.

Technical levels