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British Pound (GBP) Latest: EUR/GBP to Resume Bearish Trend

British Pound (GBP) Latest: EUR/GBP to Resume Bearish Trend

Justin McQueen,

EUR/GBP, GBP/USD Price Analysis & News

  • Has the EUR/GBP Short Squeeze Run its Full Course?
  • Real Yields Point to 0.86
  • GBP/USD Stabilises as Key Support Holds

EUR/GBP: The Pound has come under notable pressure in recent sessions with last week seeing the currency post its worst week against the USD since December and September against the Euro. A factor behind the recent weakness had stemmed from the short squeeze in EUR/GBP. However, with the move looking to have taken its full course having failed to break the 0.87 handle, GBP may find a bit of stability going forward. What’s more, as we kick off this week, the UK will ease lockdown measures further as non-essential stores and pub gardens reopen (at long last), which remains in stark contrast to Europe, which has extended lockdown measures. In turn, while there will be a time where Europe plays catch up, this time is not now and thus pressure on EUR/GBP may well resume, particularly as real yields continue to point at lower levels for the cross. On the technical front, near term support resides at 0.8635-45 with 0.8600-10 below.

Real Yields Point to EUR/GBP at 0.86

Source: Refinitiv

GBP/USD Stabilises as Key Support Holds

Elsewhere, GBP/USD has also managed a modest reprieve having found support at 1.3665-70. That said, for downside pressure to be alleviated, above 1.3800, which coincides with the 20DMA will be needed. Although, should GBP/USD break through key support, this opens the door to a move south of 1.3600 towards 1.3550.

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GBP/USD Chart: Daily Time Frame

Source: Refinitiv

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