There is scope for the pair EUR/GBP approaches 0.84 by the end of the year, according to analysts from Rabobank. They don’t expect a breakout anytime soon. They note that against a background of optimism regarding the outlook for the Eurozone and the emergence of some potential headwinds in the UK, outperforming could prove difficult for the pound in the coming weeks.
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“The first quarter of this year saw a confluence of positive fundamentals in GBP. While this encouraged speculators to rebuild long positions in the British pound, the impact has subsided in recent months. The Eurozone vaccination program has caught up with that of the UK, BoE policy makers remain very cautious about policies, and Brexit has produced several setbacks. “
“In terms of policy, we expect both the Bank of England and the ECB to remain cautious with both ready to push against any downsizing speech for the time being.”
“On a break above the 50 day SMA at 0.8630, EUR / GBP could head towards resistance at 0.8658. To break down from its current trading range, the EUR / GBP may first need to see speculation emerge about a change in Bank of England policy. This could take a long time to come. Support at the 0.8560 area before the low of 0.8472 in April ”.
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