• EUR/GBP struggled to capitalize on its modest intraday uptick to the 0.8530-35 region.
  • A modest USD pullback prompted some short-covering move around the British pound.
  • A combination of factors might act as a headwind for the sterling and help limit losses.

The EUR/GBP cross surrendered modest intraday gains and dropped to the lower end of its intraday trading range, around the 0.8515 region during the early European session.

Following the previous day's pullback from two-week tops, the EUR/GBP cross regained positive traction on Wednesday, albeit struggled to capitalize on the move beyond the 0.8530-35 region. The shared currency's relative underperformance comes amid growing market worries about the potential economic fallout from the fast-spreading Delta variant of the coronavirus.

That said, a combination of factors might continue to act as a headwind for the British pound and help limit any deeper losses for the EUR/GBP cross. Investors now seem concerned that job losses in the UK will rise after the furlough scheme ends in September. This, along with Wednesday's softer UK consumer inflation figures for July, should cap gains for the sterling.

Meanwhile, the EUR/GBP cross had a rather muted reaction and moved little after the Eurozone CPI for July was finalized at 2.2% YoY, matching original estimates. Nevertheless, the fundamental backdrop remains tilted in favour of bullish traders. Hence, any subsequent decline is more likely to be short-lived and might still be seen as a buying opportunity.

Technical levels to watch

EUR/GBP

Overview
Today last price 0.8519
Today Daily Change -0.0004
Today Daily Change % -0.05
Today daily open 0.8523
 
Trends
Daily SMA20 0.8517
Daily SMA50 0.8553
Daily SMA100 0.8591
Daily SMA200 0.8718
 
Levels
Previous Daily High 0.8537
Previous Daily Low 0.8504
Previous Weekly High 0.8518
Previous Weekly Low 0.845
Previous Monthly High 0.867
Previous Monthly Low 0.85
Daily Fibonacci 38.2% 0.8524
Daily Fibonacci 61.8% 0.8517
Daily Pivot Point S1 0.8506
Daily Pivot Point S2 0.8489
Daily Pivot Point S3 0.8474
Daily Pivot Point R1 0.8538
Daily Pivot Point R2 0.8554
Daily Pivot Point R3 0.857

 

 

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