EUR / GBP extends bounce to 0.8925 after holding above 0.8860

• Euro eases downward pressure against the pound at the start of the week.
• EUR / GBP moves away from the key barrier of 0.8860.

EUR / GBP is starting the week with a bullish tone. It reached at the beginning of the European session the highest level since Wednesday at 0.8924. After this it fell back to find support around 0.8900. It is trading at 0.8910, in a day of limited travel at the moment.

He feriado en EE.UU. It is taking volume away from the currency market. While the EUR / USD trades in a small range below 30 pips and the GBP / USD moves more directionally, dropping almost 50 pips.

At UK, the government is seeking to speed up the vaccination process for the population to complete the process by September. This advance has been a supporting factor for the pound in recent days, which now appears to be fading.

In Europe The novelty was during the weekend the vote within the ruling party for the next leader, which Armin Laschet won. It is seen as a continuation of Angela Merkel’s policies, although her candidacy for the September elections is not certain. In Italy, Prime Minister Conte faces a vote of confidence between Monday and Tuesday.

Looking ahead to the next few days, the focus will be on the meeting of European leaders and that of the European Central Bank, although no major changes are expected.

Technical overview

He EUR / GBP eased downward pressure after sustaining above 0.8860 and returning above the 20 SMA in four hours, now at 0.8898 (important intraday support). In general, a downward bias remains, but to enable an extension of the path the pound has to break the 0.8860 barrier, which would leave the cross vulnerable to a downward acceleration.

To the upside, at 0.8955 is the next EUR / GBP resistance and then above it will follow 0.8995 / 0.9000.

Technical levels