The EUR/GBP pair is trading in a downtrend. The turn of the week brought a several-day correction, but this rebound did not have much dynamics, and already now we see a clear return to the main trend. Close by are the lows of April and May last year. So it seems that the last touch of the downward trend will be the movement towards 0.87 or a little bit lower. Such clear support, after such a large downward movement, should lead to at least a larger upward correction.

eurgbp daily chart
EURGBP Daily – price broke out from a long term consolidation

EUR/GBP after breaking out of a sideways pattern

Currently, the Pound’s strength comes from the high rate of vaccination, which distances visions of another lockdown. This condition will begin to fade with time as vaccine supplies to EU countries are expected to increase in the coming months, moreover some of them are already negotiating purchases on their own.

In addition, the ECB announced that the scenario of a strong economic rebound this summer is not at risk. So it seems that once the market discounts the vaccination issue, it may start pricing in an upcoming rebound in the European economy. For now, however, price should head towards 0.87.

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