No End Yet in Sight for EUR/GBP Losses

GBP price, news and analysis:

  • EUR/GBP remains technically weak after breaking below a key support line on the charts.
  • The cross is already at its lowest level since May 2020 and there is now little support ahead of the April 30 low of 0.8671.

EUR/GBP losses pile up

EUR/GBP is losing ground for the fourth successive session Wednesday after breaking below the support line of a symmetrical triangle pattern on the charts in place since mid-May last year. The price is now at its lowest since May 20 and there is bound to be some profit-taking in due course. However, there is little support ahead of the end-April low of 0.8671.

EUR/GBP Price Chart, Daily Timeframe (August 17, 2020 – February 3, 2021)

Source: IG (You can click on it for a larger image)

The move lower reflects the impression that the UK is ahead of the EU in vaccinating against the coronavirus even though the pandemic response in the UK has been criticized and it has one of the highest death rates in the world.

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More broadly, though, GBP is mixed against other currencies. GBP/USD is trading sideways while Sterling is rising against the Swiss Franc, the Japanese Yen and the Australian Dollar but falling against the Canadian Dollar and the New Zealand Dollar.

This is against the background of largely positive market sentiment that is helping global stocks and commodities like crude oil but is currently having little impact on currencies.

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily 4% 3% 4%
Weekly -7% 15% 1%

Ahead of the Bank of England’s monetary policy decision Thursday, you might like to check out this forex traders’ guide to the BoE

We look at currencies regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

— Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

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