- The EUR / GBP rally from 0.8700 hrs has stagnated below the resistance zone at 0.8860 / 70.
- The euro remains firm with the pound weighed by COVID-19 and Brexit risks.
- Above 0.8865, the pair could accelerate its upward trend towards 0.9060 – Commerzbank.
The euro rally from its low near 0.8700 earlier this week has stalled just below the top of the trading range for the past six weeks, at 0.8860 / 70. The pair failed during of its three attempts to break through the peaks of April 7 and April 21, although it has remained stable above 0.8800 in the past few sessions.
The euro appreciates on the weakness of the pound
The common currency pushed higher this week, helped by the general weakness of the pound. the sterling was struck by market concerns about the economic impact of the coronavirus, the UK will be among the last European countries to lift pandemic restrictions and the consequences of Brexit.
Recent British data have also not helped to cheer up. The RICS house price index fell 21% in April, while GDP figures rose 5.8% in March, the largest monthly decline since records started in 1997.
EUR / GBP to complete base on close above 0.8865 – Commerzbank
According to Karen Jones, FICC Technical team leader Analysis Research at Commerzbank, above 0.8865, pair would confirm base and target area of 0.9060, “EUR / GBP is showing signs of recovery and is trading above 200 days at 0.8715 – it seems well placed to challenge .8864 / 65. A close above here will confirm a short term base targeting .9060 This potential base will remain valid as the market continues to trade above the April low at .8671. “