- EUR / GBP was once again met with new offers just before the 0.8600 round level.
- The nervousness of COVID-19, Brexit problems could act as a headwind for the GBP and limit declines.
The crossing EUR/GBP it fell throughout the middle of the European session and fell to fresh daily lows, around the 0.8570-65 region in the last hour.
The cross witnessed a modest pullback from near the 0.8600 round level, or weekly highs, and has now retraced some of the positive move from the previous day. The sterling relative outperformance lacked an obvious fundamental catalyst and could only be attributed to some trade repositioning ahead of Fed Chairman Jerome Powell’s speech.
That said, the worsening COVID-19 situation in the UK could act as a headwind for the British pound. It is worth mentioning that Britain has been reporting more than 30,000 coronavirus cases in recent days. Aside from this, Brexit woes should help limit deeper losses for the EUR / GBP cross, warranting some caution before positioning for any further depreciation moves.
There is no important economic data that moves the market that is published on Friday, neither from the euro zone nor from the United Kingdom. Powell’s remarks at the Jackson Hole Symposium could instill some volatility in the forex market and provide a short-term trading boost to the EUR / GBP cross.
From a technical perspective, the repeated failures near the 0.8590-95 region now appeared to constitute the formation of a bearish double top. However, it will be prudent to wait for sustained weakness below the 0.8550-40 horizontal zone before confirming that the EUR / GBP cross has peaked in the near term.
Technical levels
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
