EUR/GBP rebounds from two-week lows toward 0.8850
- ECB officials continue to speak about higher interest rates.
- Euro is supported by higher EZ bond yields.
- EUR/GBP approaching again critical resistance area of 0.8850.
The EUR/GBP is rising for the second day in a row, after hitting on Monday the lowest level in two weeks. The cross climbed from 0.8769 and peaked on Tuesday at 0.8846, supported by a stronger Euro across the board.
Euro supported by yields
The Euro is up versus the Pound and the Swiss Franc on Tuesday. Higher Eurozone bond yields are helping the common currency. The German 10-year bond yield stands at 2.29% the highest in two days up 2.75% for the day.
European Central Bank officials continue to speak with a hawkish tone while in the UK, concerns about the health of the economy remain intact. UK fundamentals are on debate at the Bank of England’s Monetary Policy Committee.
“As UK fundamental remains characterised by recession, high inflation, low investment growth and weak productivity we continue to expect EUR/GBP to edge towards 0.90 on a 6 to 9 month view. That said, we will be continuing to watch developments surrounding the protocol closely”, explained analysts at Rabobank.
The chart show risks titled to the upside in EUR/GBP after the cross was able to hold above the 20-day Simple Moving Average (today at 0.8785). The upside remains limited by the critical resistance area of 0.8850. A daily close well above 0.8850 should open the doors to more gains in the short-term.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
