EUR/GBP bounces off lows, finds some support near 0.8600 mark


  • EUR/GBP witnessed a turnaround on Thursday and dropped over 40 pips from one-week tops.
  • Renewed USD selling bias prompted short-covering around the GBP and exerted some pressure.
  • The latest ECB monetary policy decision failed to impress bulls or lend any support to the cross.

A strong pickup in demand for the British pound dragged the EUR/GBP cross to fresh daily lows, though lacked any follow-through selling below the 0.8600 round-figure mark.

The cross struggled to capitalize on its intraday positive move to one-week tops, instead witnessed a dramatic turnaround from the 0.8640-45 region and has now erased a major part of the overnight gains. As investors digested the recent Brexit developments, renewed US dollar selling bias prompted aggressive short-covering around the British pound. This, in turn, was seen as a key factor that exerted some downward pressure on the EUR/GBP cross.

On the other hand, the euro bulls were a bit disappointed after the European Central Bank (ECB) steered clear of any taper talk at the latest policy meeting on Thursday. In the post-meeting press conference, ECB President Christine Lagarde reiterated that risks remain broadly balanced. The ECB also released a fresh round of staff projections and lifted its inflation and GDP growth forecasts, though did little to provide any lift to the shared currency.

With the GBP price dynamics turning out to be an exclusive driver of the EUR/GBP pair's intraday move, fresh COVID-19 jitters should help limit any further downside, at least for the time being. There are speculations that the UK may delay plans to end restrictions fully on June 21 in light of the spread of the so-called Delta variant. This makes it prudent to wait for acceptance below the 0.8600 mark before traders start positioning for any further depreciating move.

Technical levels to watch

EUR/GBP

Overview
Today last price 0.8602
Today Daily Change -0.0025
Today Daily Change % -0.29
Today daily open 0.8627
 
Trends
Daily SMA20 0.8611
Daily SMA50 0.8632
Daily SMA100 0.8655
Daily SMA200 0.8845
 
Levels
Previous Daily High 0.8638
Previous Daily Low 0.8589
Previous Weekly High 0.8646
Previous Weekly Low 0.8566
Previous Monthly High 0.8711
Previous Monthly Low 0.8561
Daily Fibonacci 38.2% 0.862
Daily Fibonacci 61.8% 0.8608
Daily Pivot Point S1 0.8598
Daily Pivot Point S2 0.8569
Daily Pivot Point S3 0.8549
Daily Pivot Point R1 0.8647
Daily Pivot Point R2 0.8667
Daily Pivot Point R3 0.8696

 

 

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