EUR/GBP Continues to Bounce Against Stubborn Resistance,Where Next?
EUR/GBP News, Price and Analysis:
- Eurozone and UK both heading towards a severe recession.
- Spike low at 0.9000 may be re-tested.
EUR/GBP Looking to Make a Trading Range
The one rally in EUR/GBP from the high 0.8200s to just 0.9500 looks like it has run out of momentum with the pair now looking to set-up a new trading range in the short-term. The mid-February onwards rally was mainly driven by a very weak Sterling complex that hit multi-year and multi-decade lows against a range of currencies. Sterling is now consolidating and attempting to push higher, despite recently announced sentiment data that pointed to a sharp economic shock for the UK. The Euro is under pressure as well from sentiment data that suggests that GDP may fall sharply in the coming quarters, piling pressure on the ECB, or member states, to act more forcibly.
EUR/GBP has rejected the 0.9500 area recently and is unlikely to break above there unless the economic backdrop improves. There are three recent lows just below 0.9000 that should provide support, although a break and close below there would open the way to the 0.8850 area. Both currencies will be driven by coronavirus updates and it will likely be difficult to break 0.9000 to 0.9500 in the short-term. The pair remain extremely volatile, using the ATR indicator, while the three moving averages provide support lower down.
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EUR/GBP Daily Price Chart (October 2019 – March 24, 2020)
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