- EUR / GBP was seen consolidating its recent gains in the zone of two-month highs.
- The Bank of England meeting and Brexit concerns continued to act as a headwind for the British pound.
The EUR / GBP cross was seen between timid gains and minor losses during the first half of the European session and was last seen hovering in neutral territory, around the 0.8570-75 region.
The cross consolidated the inspired rally left by last week’s meeting of the Bank of England, which led to a two-month high, and to test the 200-day SMA. The BoE surprised investors and decided to keep interest rates stable. This comes amid concerns that the UK government will activate Article 16 of the Northern Ireland Protocol, which turned out to be a key factor behind the sterling’s relative underperformance.
Meanwhile, the shared currency struggled to gain traction amid a rebound in demand for US dollars. In the meantime, the EUR / GBP maintains its short-term bullish tone, but still limited by the 0.8600 area. So far this Monday, tours remain limited.
From a technical perspective, acceptance above the 200 SMA (0.8585) and above 0.8600 will set the stage for further gains. EUR / GBP could then break through an intermediate hurdle near the 0.8635 horizontal zone and aim to test the September monthly highs around the 0.8655 / 60 region. Momentum could extend towards 0.8700.
Technical levels
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