EUR/GBP’s sharp rally continues, pair now flirting with 50DMA in 0.8640s


  • EUR/GBP’s sharp rally has continued for a second day, with the pair now flirting with its 50DMA in the 0.8640s.
  • EUR/GBP is now on for its best week since early September 2020 and is up roughly 1.8%.

EUR/GBP has continued to correct sharply to the upside on Wednesday and managed to post highs at its highest level in over a month above the 0.8650 handle and above its 50-day moving average at 0.8647. The pair has since pulled back a little from extremes and is trading in the 0.8640s. On the day, EUR/GBP is up another 0.7% or over 60 pips. On the week, the pair is now up roughly 0.8% or over 150 pips. That means the exchange rate is set for its best week since early September 2020, a week when sterling was rocked by no-deal Brexit fears.

Driving the day

In contrast to early September, when the UK government’s decision to introduce legislation that would break the EU Withdrawal Agreement signed back in October 2019 sent fears of a no-deal end to the UK/EU transition period into overdrive, there is very little by way of fundamental explanation for recent gains in EUR/GBP. The overarching picture of a UK economy that is getting the virus under control, racing ahead with its vaccine rollout and heading towards a swift economic reopening versus an EU that is struggling to contain the third wave of infections, is behind with its vaccine rollout and is likely to remain in lockdown for some time is still very much true. This, the long-term EUR/GBP bears continue to argue, remains a long-term negative for the pair.

Thus, market commentators are chalking this week’s sharp rally up to a technical correction/profit-taking/position adjustment in wake of a prolonged sell-off in the pair. Indeed, between the start of the year and this Monday (when the pair hit multi-month lows under 0.8450), EUR/GBP had dropped around 5.5%. Following the recent retracement higher, the drop since the start of the year is still around 3.5%. Some market strategists have been arguing that relatively higher levels of positivity regarding the UK’s near-term economic outlook versus that of the EU’s is now “in the price” and has been for some time, something which recent price action suggests likely is the case. If EUR/GBP is to continue to head lower, more UK good news and more EU bad news are likely going to be needed.

EUR/Gbp

Overview
Today last price 0.8652
Today Daily Change 0.0061
Today Daily Change % 0.71
Today daily open 0.8591
 
Trends
Daily SMA20 0.8563
Daily SMA50 0.8651
Daily SMA100 0.8819
Daily SMA200 0.8932
 
Levels
Previous Daily High 0.8592
Previous Daily Low 0.8486
Previous Weekly High 0.8563
Previous Weekly Low 0.8493
Previous Monthly High 0.8674
Previous Monthly Low 0.8503
Daily Fibonacci 38.2% 0.8551
Daily Fibonacci 61.8% 0.8526
Daily Pivot Point S1 0.8521
Daily Pivot Point S2 0.8451
Daily Pivot Point S3 0.8415
Daily Pivot Point R1 0.8627
Daily Pivot Point R2 0.8662
Daily Pivot Point R3 0.8732

 

 

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.

Feed news

Get Weekly Crypto trade ideas!  
Empower yourself with the best market insights

Join FXStreet Premium!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD retains weekly gains trades above 1.2000

EUR/USD peaked at 1.2079, now stable in the 1.2030 region. The shared currency holds on to recent gains despite renewed demand for its American rival.

EUR/USD News

GBP/USD retreats from 1.40 despite upbeat UK job figures

GBP/USD is extending its falls after retreating from 1.40 as the dollar edges higher. Earlier, the UK reported a drop in the unemployment rate to 4.9%, better than expected. The Claimant Count Change also beat estimates with 10.1K. 

GBP/USD News

XAU/USD clings to modest gains around $1,780 despite USD strength

The XAU/USD gained traction in the early American session and climbed to a daily high of $1,780. Although the greenback started to gather strength in the second half of the day, the pair stayed relatively resilient and was last seen rising 0.35% on the day at $1,778.

Gold News

WeWork and Venmo join the Bitcoin craze while prices consolidate

The announcement by WeWork that it will begin accepting payments in select cryptocurrencies, including Bitcoin, Ethereum, USD Coin, Paxos, and several others, is another sign of adoption and follows the decision by Tesla to do the same

Read more

Bank of Canada Preview: Dovish surprise to lift USD/CAD

The Bank of Canada is widely expected to keep its policy rate unchanged at 0.25% on Wednesday. However, the improving economic outlook and recent remarks from officials suggest that the BoC could become the first major central bank to lay out a roadmap out of the ultra-loose policy.

Read more

Forex MAJORS

Cryptocurrencies

Signatures