- The pound is having the best day in weeks against the euro.
- EUR / GBP fell back below the 20-day moving average.
After a short-lived bounce to 0.8670, the EUR / GBP resumed the decline and broke below 0.8600 for the first time since April 7. It bottomed out at 0.8587, and at the time of writing, it’s hovering around 0.8600, around 20 days. moving average.
The GBP / USD rally caused the cross to fall. With the pound testing 1.4000, a break to the upside could push the EUR / GBP further lower. The strength of the pound across the board is not driven by any particular catalyst.
Expectations about the economic recovery and news about the vaccination rate are likely to be closely watched the next day. In the UK, the employment report is due on Wednesday. On Thursday, the European Central Bank (ECB) will have its policy meeting, without any expected changes.
Euro recovery ends
From a technical perspective, the EUR / GBP has broken out of a consolation range after being rejected above 0.8700. The pair is correcting down the rally that started from multi-month lows at 0.8470 (April 5 low). The short-term outlook favors the downside; A consolidation below 0.8600 is needed for the pound to maintain positive momentum.
A recovery above 0.8640 would ease the downward pressure. Above the next resistance it stands at 0.8665. The key level on the upside is 0.8700, with a daily close clearly above, opening the doors for more gains.
Technical levels
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