- EUR/GBP hits a four-week high just shy of 0.8460, up 0.62% on Tuesday.
- British pound continues to be battered as GBP/USD breaks below 1.2600.
- EUR/GBP Price Forecast: Has a neutral bias, but a daily close above the 200 DMA would further strengthen the case for a change in trend.
The EUR/GBP rose to fresh four-week highs around 0.8458 on Tuesday, amid a risk-off sentiment in the market, which sent sterling tumbling across the board, shedding 0.61% against the euro and 1% against the euro. dollar. At the time of writing, the EUR/GBP is trading at 0.8453.
Risk aversion keeps sterling a laggard in forex space
European and US equities are still on the defensive, trading at a loss. China’s recent coronavirus outbreak in Shanghai, which has spread to Beijing and Mongolia, has investors on their toes because, according to China’s zero-tolerance of Covid-19, it could trigger another wave of inflation courtesy of supply chain disruptions. supply. Furthermore, the escalations in the conflict between Ukraine and Russia summed up the gloomy mood in the market.
On Tuesday, the EUR/GBP opened around the 0.8400 figure in the Asian session. However, as European traders took control, the British pound weakened, sending the EUR/GBP pair higher from 0.8393 to 0.8456.
EUR/GBP Price Forecast: Technical Outlook
EUR/GBP remains biased neutral. However, it is trading above the 200-day moving average (DMA) which is at 0.8445, indicating that the bias will change to neutral-bullish if a daily close above the latter is achieved. A break above 0.8512 would change the bias to the upside, but solid resistance lies ahead. It is worth noting that the rise in EUR/GBP over the last three trading sessions caused a jump in the Relative Strength Index (RSI), but at 64.66, it would provide some room to the upside for EUR/GBP if the bulls attempt to push. prices up.
That said, the first resistance for the EUR/GBP would be the daily high of February 7 at 0.8478. A break of the latter would expose the 0.8500 figure. Once cleared, the next resistance would be the 1yr downtrend line around the 0.8535-50 zone.
Technical levels
Source: Fx Street
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