- EUR/GBP remains on track to post the first gain in five days.
- Bullish limited by the simple moving average of 20 days.
The EUR/GBP it jumped on Tuesday from two-week lows near 0.8300 to hit 0.8382, the highest level since last Wednesday. During US hours, it is pulling back, trading below 0.8350 again, after failing to hold above the 20-day simple moving average (0.8370).
From Ukraine to BoE comments
The pound weakened earlier on Wednesday following comments from Bank of England Deputy Governor Dave Ramsden. He said “some further modest tightening of monetary policy is likely to be appropriate in the coming months.” His words were seen as less aggressive compared to his previous comments. A surprising approach considering the latest UK economic report was firm.
The crisis in eastern Ukraine intensified on Wednesday. Sanctions from the European Union and the US are expected to be announced at any time. An escalation of the conflict could further weaken the euro.
key levels
A daily close above 0.8370 in EUR/GBP should clear the way for a test of the 0.8400 area which also contains the 55-day SMA. A recovery above should ease downside pressure. The next resistance is located at 0.8425/30.
On the downside, 0.8330 is again a support level to watch, followed by the 0.8300/05 area. A consolidation below 0.8300 would point to more losses.
Technical levels
Source: Fx Street
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