- The pound loses strength against the euro after reaching highs in a month and a half.
- EUR / GBP manages to avoid a close below 0.8500 for now.
EUR / GBP is trading virtually unchanged on Wednesday after falling to the lowest intraday level in a month and a half at 0.8494. From there there was a rebound to the 0.8510 area.
The crossing is giving the first sign of stability after five days in a row with declines. During that period, it went from highs in months to lows in a month, in a matter of a few days. A close below 0.8500 will point to further losses in the short term, exposing the 2021 low at 0.8448.
The pound remains firm against the euro despite a climate of risk aversion throughout the financial market, which tends to favor the common currency more. The crisis of energy prices in Europe have played against the EUR / GBP. The losses occurred even despite the particular problems of the United Kingdom and the new difficulties due to Brexit.
Rabobank analysts say immigration is not the only Brexit-related issue. They point out that France is threatening to cut energy supply to the UK, if the agreement on the fishing sector is not fully implemented. There are also counterpoints to the Northern Ireland protocol. These analysts’ year-end EUR / GBP target of 0.84 has been raised to 0.85.
Technical levels
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