EUR/GBP steadies below 0.8700 following a reversal from 0.8750

Euro's reversal from the 0.8900 area finds support at 0.8750.
The pound appreciates as Sunak cams the market.
EUR/GBP likely to reach 0.90 in the coming months – SocGen.

Guillermo Alcala FXStreet

The euro has given away gains on Tuesday against a stronger British pound, buoyed by the market’s enthusiasm as Rishi Sunak became Prime Minister.

The pair has reversed Monday’s gains pulling back from levels neat 0.8760 to session lows at 0.8665 area where it seems to have found support to consolidate below 0.8700.

The pound rallies as Sunak calms the markets

UK’s new Prime Minister Rishi Sunak's first speech, pledging to restore economic stability has brought back confidence to the markets. Furthermore, the re-appointment of Jeremy Hunt as chancellor of the exchequer has increased hopes of a market-friendly cabinet, which has buoyed the pound across the board.

On the macroeconomic docket, the German IFO Business Climate Index showed that sentiment remains practically unchanged from the previous month. These figures have passed virtually unnoticed, as the focus is set on the outcome of the ECB’s monetary policy meeting, due next Thursday.

EUR/GBP expected to crawl towards 0.90 – SocGen

In a bigger picture, Kit Juckes, Chief Global FX Strategist at Société Générale, sees the pair advancing toward 0.90: “With the economy surely already in recession and set to suffer from possibly even tighter fiscal policy, sterling is unlikely to enjoy much more of a relief bounce and over time, EUR/GBP is likely to meander slowly up to 0.90 or so.”

Technical levels to watch

EUR/GBP

Overview
Today last price	0.8688
Today Daily Change	-0.0066
Today Daily Change %	-0.75
Today daily open	0.8754

Trends
Daily SMA20	0.8755
Daily SMA50	0.8677
Daily SMA100	0.8592
Daily SMA200	0.8496

Levels
Previous Daily High	0.8764
Previous Daily Low	0.8662
Previous Weekly High	0.8781
Previous Weekly Low	0.8578
Previous Monthly High	0.9254
Previous Monthly Low	0.8566
Daily Fibonacci 38.2%	0.8725
Daily Fibonacci 61.8%	0.8701
Daily Pivot Point S1	0.8689
Daily Pivot Point S2	0.8625
Daily Pivot Point S3	0.8587
Daily Pivot Point R1	0.8791
Daily Pivot Point R2	0.8829
Daily Pivot Point R3	0.8893

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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