EUR/GBP climbs back closer to 0.8570 horizontal resistance
- EUR/GBP regained traction on Thursday and climbed to a multi-day-old trading range hurdle.
- Rising COVID-19 cases, Brexit woes weighed on the GBP and remained supportive of the move.
- Stronger USD acted as a headwind for the euro and might cap any further gains for the cross.
The EUR/GBP cross climbed to the top end of a three-day-old trading range, around the 0.8570 region during the first half of the European session.
Following the previous day's downtick, the cross managed to regain positive traction on Thursday and was supported by the emergence of some selling around the British pound. Worries about the spread of the highly contagious Delta variant of the coronavirus in the UK turned out to be a key factor behind the sterling's underperformance.
It is worth mentioning here that Britain has been reporting over 30K cases per day. This comes on the back of a study in the UK that protection from two doses of the Pfizer or AstraZeneca vaccines begins to wane within six months. Apart from this, Brexit woes acted as a headwind for the GBP and provided a modest lift to the EUR/GBP cross.
On the other hand, the shared currency struggled to capitalize on its recent bounce from YTD lows amid a strong pickup in demand for the US dollar. This might hold traders from placing aggressive bullish bets around the EUR/GBP cross and cap gains amid absent relevant market-moving economic releases, either from the Eurozone or the UK.
From a technical perspective, the EUR/GBP cross, for now, has stalled this week's retracement slide from one-month tops. Some follow-through buying beyond the 0.8570 region will be seen as a fresh trigger for bullish traders and set the stage for the resumption of the recent strong recovery move from the lowest level since February 2020.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
