EUR/GBP bid as UK battles new coronavirus variant

EUR/GBP remains bid after closing above 0.90 on Monday.
UK's coronavirus lockdown restrictions weigh over the British pound.

Omkar Godbole FXStreet Contributor

Sterling is losing ground against its Eurozone counterpart, pushing EUR/GBP higher, with the UK imposing stricter restrictions to control the spread of the new coronavirus variant.

With the country's health system facing the risk of being overwhelmed by the new variant, UK's Prime Minister Boris Johnson ordered England into a new national lockdown on Monday.

"Everyone in England must stay at home except for permitted reasons during a new coronavirus lockdown expected to last until mid-February," Johnson said.

The tougher restrictions overshadowed Brexit and vaccine optimism and weighed over Pound. The currency remains under pressure at press time. EUR/GBP jumped from 0.8940 to 0.9018 on Monday and is currently trading near 0.9030, representing a 0.15% gain on the day.

Further gains, however, may remain elusive, as EUR/USD is looking heavy. "The latest IMM data show net dollar shorts climbed to $30.4 billion in the week ended Dec. 29 while net EUR/USD longs stood at $21.875 billion, reflecting the market's view that the trend will continue in 2021," according to Reuters.

The hourly chart shows the pair is struggling to capitalize on the breakout above a descending trendline confirmed on Monday.

Technical levels

EUR/GBP

Overview
Today last price	0.903
Today Daily Change	0.0002
Today Daily Change %	0.15
Today daily open	0.9028

Trends
Daily SMA20	0.9049
Daily SMA50	0.9007
Daily SMA100	0.9037
Daily SMA200	0.8983

Levels
Previous Daily High	0.9049
Previous Daily Low	0.8944
Previous Weekly High	0.9093
Previous Weekly Low	0.8932
Previous Monthly High	0.923
Previous Monthly Low	0.8929
Daily Fibonacci 38.2%	0.9009
Daily Fibonacci 61.8%	0.8984
Daily Pivot Point S1	0.8965
Daily Pivot Point S2	0.8902
Daily Pivot Point S3	0.886
Daily Pivot Point R1	0.907
Daily Pivot Point R2	0.9112
Daily Pivot Point R3	0.9175

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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