• EUR/GBP turns lower for the fifth straight day and drops to over a one-week low on Monday.
  • UK government withdraws tax cut plan, which boosts sterling and exerts pressure on the cross.
  • Recession fears, modest USD strength weighs on the euro and contributes to the offered tone.

The EUR/GBP cross attracts fresh selling following an early uptick to the 0.8830 region and turns lower for the fifth successive day on Monday. Spot prices drop to over a one-week low during the mid-European session, with bears now awaiting sustained weakness below the 0.8700 round-figure mark.

UK Finance minister Kwasi Kwarteng takes a U-turn on Monday and confirms that his government will not go ahead with a plan to cut the top rate of income tax from 45%. This, in turn, is seen as a key factor behind the British pound's relative outperformance against its European counterpart and exerting downward pressure on the EUR/GBP cross.

The shared currency, on the other hand, is undermined by speculation of a potential recession in the region amid the risk of a further escalation in the Russia-Ukraine conflict. This, along with a modest US dollar strength, weighs on the euro and contributes to the offered tone surrounding the EUR/GBP cross, supporting prospects for further losses.

That said, a bleak outlook for the UK economy might hold back the GBP bulls from placing aggressive bets and lend some support to the EUR/GBP cross, at least for the time being. Nevertheless, spot prices have retreated over 500 pips from a two-year high, around the 0.9235 region touched in September and seem vulnerable to prolonging the descending trend.

Technical levels to watch

EUR/GBP

Overview
Today last price 0.8709
Today Daily Change -0.0069
Today Daily Change % -0.79
Today daily open 0.8778
 
Trends
Daily SMA20 0.8756
Daily SMA50 0.8578
Daily SMA100 0.8557
Daily SMA200 0.8468
 
Levels
Previous Daily High 0.885
Previous Daily Low 0.8752
Previous Weekly High 0.9254
Previous Weekly Low 0.8752
Previous Monthly High 0.9254
Previous Monthly Low 0.8566
Daily Fibonacci 38.2% 0.879
Daily Fibonacci 61.8% 0.8813
Daily Pivot Point S1 0.8737
Daily Pivot Point S2 0.8695
Daily Pivot Point S3 0.8639
Daily Pivot Point R1 0.8835
Daily Pivot Point R2 0.8892
Daily Pivot Point R3 0.8933

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD drops below 1.0550 after upbeat US data

EUR/USD drops below 1.0550 after upbeat US data

EUR/USD lost its traction and turned negative on the day below 1.0550 in the American session. The ISM Services PMI data in the US improved to 56.5 in November from 54.4 in October, providing a boost to the US Dollar. 

EUR/USD News

GBP/USD extends slide below 1.2200 on renewed US Dollar strength

GBP/USD extends slide below 1.2200 on renewed US Dollar strength

GBP/USD extended its slide and fell below 1.2200 on Monday. The better-than-expected ISM Services PMI data from the US and the risk-averse market environment, as reflected by falling US stocks, weigh on the pair n the American session.

GBPUSD News

Gold bears challenging $1,770.00

Gold bears challenging $1,770.00

Gold retreated sharply after hitting a five-month high of $1,810.08 and trades around $1,770 at the time being. The USD started the day on the back foot amid optimism fueled by news coming from China, as the country is easing coronavirus-related restrictions.

Gold News

Ethereum price pops as this week could be the most profitable one of the year

Ethereum price pops as this week could be the most profitable one of the year

Ethereum (ETH) is booking over 1% of gains this morning, which as such is not that uncommon. What is rather important is that Ethereum price is moving away from the bottom of 2022.

Read more

TSLA sinks after automaker cuts Shanghai production

TSLA sinks after automaker cuts Shanghai production

Tesla (TSLA) stock gave up 4.7% in Monday's premarket after Bloomberg reported that its Shanghai factory would trim record production by 20% due to sluggish Chinese demand.

Read more

Forex MAJORS

Cryptocurrencies

Signatures