- EUR / GBP finds new selling on Monday and is moving lower for the third day in a row.
- A sudden spike in demand for the British pound is seen as a key factor putting pressure on the pair.
- Oversold conditions warrant some caution before positioning for any further bearish movement.
The crossing EUR/GBP has witnessed some sales during the European session on Monday and has fallen to fresh 13-month lows, around the 0.8515-10 region in the last hour.
The crossing has not been able to capitalize on its attempted recovery movement and has encountered new sales near the 0.8560-65 region, moving lower for the third day in a row on Monday. Sterling’s outperformance relative to its European counterpart could be attributed to a very successful vaccine distribution program and the diminishing possibility of further easing of monetary policy by the Bank of England.
On the other hand, Concerns about the economic consequences of the third wave of COVID-19 infections in Europe they continue to weigh on the common currency. Investors appear concerned that pandemic-related restrictions could derail the eurozone’s fragile economic recovery amid slow vaccination. This has been seen as another factor that has contributed to the intraday decline of the EUR / GBP pair to the lowest level since February 2018.
Having said that, The current dispute over vaccines between the EU and the UK could limit any uncontrolled movement in the British pound. It is worth mentioning that according to the news, the European Commission has threatened to ban exports of Oxford-AstraZeneca vaccines to countries that have higher vaccination rates, including the UK. This, coupled with the recent escalation of diplomatic tensions between the UK and China, could help limit the fall of the EUR / GBP cross.
Even from a technical perspective, Daily RSI remains close to oversold territory and warrants some caution before positioning for any further bearish movement. In the absence of major economic releases from the market, be it from the UK or the Eurozone, the EUR / GBP cross could witness some short covering move and allow the bulls to make a further attempt to regain the round 0.8600 level .
EUR / GBP technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
