• The euro remains weak, limited below 0.8500.
  • Expectations of a BoE rate hike have boosted the pound.
  • EUR/GBP: Breach of 0.8449 support would increase bearish momentum – Commerzbank.

The euro is picking up on Friday, after having depreciated for six consecutive days. The pair, however, remains on the defensive below 0.8500, at a short distance from 0.8450 year-to-date lows.

Pound rises on BoE tightening expectations

The British pound has been showing strength against the main currencies this week, buoyed by market expectations that the Bank of England might be the first major central bank to hike interest rates after the COVID-19 crisis. The BoE could start increasing interest early next year in an attempt to tackle inflationary pressures.

BoE hike expectations and the moderate risk appetite observed this week seem to have offset market fears about the fuel shortages in the UK, which sent the sterling tumbling over the previous weeks. Against the euro, the pound has appreciated nearly 2% after bottoming in late September, while against the US dollar the pound has rallied 1.75% from the previous week’s lows.

EUR/GBP: Breach of 0.8449 lows would expose the 0.8239 target – Commerzbank

From a technical perspective, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, warns about a bearish move below 0.8449: “EUR/GBP is under pressure near term following last week’s failure just ahead of 0.8671, the July 2021 high. The market has reacted back to key support at 0.8471/49, the recent lows and lows since 2019. We again look for these to hold the downside (…) “Below 0.8449 would target the 0.8239 2019 low.”

Technical levels to watch

EUR/GBP

Overview
Today last price 0.8496
Today Daily Change 0.0015
Today Daily Change % 0.18
Today daily open 0.8481
 
Trends
Daily SMA20 0.8555
Daily SMA50 0.8547
Daily SMA100 0.8564
Daily SMA200 0.8635
 
Levels
Previous Daily High 0.8522
Previous Daily Low 0.8475
Previous Weekly High 0.8658
Previous Weekly Low 0.8526
Previous Monthly High 0.8658
Previous Monthly Low 0.8501
Daily Fibonacci 38.2% 0.8493
Daily Fibonacci 61.8% 0.8504
Daily Pivot Point S1 0.8463
Daily Pivot Point S2 0.8445
Daily Pivot Point S3 0.8416
Daily Pivot Point R1 0.8511
Daily Pivot Point R2 0.8541
Daily Pivot Point R3 0.8559

 

 

 

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