- Short-term trend continues to favor the pound.
- GBP / USD rally gives more strength to the British currency.
The EUR / GBP is falling on Wednesday after the cross’s recovery failed to pick up steam and after meeting resistance below 0.8800. After hitting 0.8778 at the start of the European session, it reversed direction falling to 0.8746, the low in three days.
Trading 0.8760 / 65, the euro fell modestly against the pound on Wednesday. The trend is still clearly downward in the short term, although the cross has already accumulated after days in consolidation mode. The risk remains skewed to the downside and the break at 0.8745 would expose this year’s low at 0.8737. The next strong support is at 0.8680.
A rally in EUR / GBP above 0.8800 would ease the downward pressure, but just after a return above 0.8860 / 0.8880 it could begin to analyze whether a floor has been established.
The pound is confirming the gains that followed the Bank of England meeting, where negative interest rates were ruled out for the time being. Added to this is the expectation of the vaccination process in the United Kingdom and optimism in the stock markets, with several indices in the world at record highs or in several months. The appetite for risk tends to benefit the pound more than the euro.
Another stimulating factor is the rally del GBP/USD, which broke above 1.3800, leaving behind another relevant resistance and fueling the rally.
Technical levels
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