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Reversal off Friday Gbp0.8719 High Extends in Asia

EURGBP
MNI (London)
  • Early Asia risk aversion saw GBP/USD ease away from its late Friday recovery high of $1.3842 to $1.3810 but dip quickly attracted demand as the EUR continued to see pressure via its crosses.
  • EUR/GBP, which had seen a high of Gbp0.8719 in early Europe Friday before it was pressed back to Gbp0.8656 ahead of the close, continued its correction phase in Asia as rate was pressed through its technically key 10-dma (current Gbp0.8661) and through recent lows at Gbp0.8641/40(Apr12-13) to Gbp0.8630.
  • Whilst rate holds below its 10-dma seen turning outlook to short term bearish and bringing the base of the 1.0% 10-dma envelope (current Gbp0.8574 ) into play, having been rejected away from the topside of the 1.0% envelope.
  • Interim support noted at Gbp0.8625(38.2% 0.8472-0.8719, 50-dma) ahead of Gbp0.8596(50%), Gbp0.8582(Apr07 low).
  • Resistance Gbp0.8661/66(10-dma, intraday high), Gbp0.8685/0.8700, Gbp0.8719.
  • MNI Techs: The inability to remain above the 0.8700 handle is an early indication that the recent corrective bounce is over. A deeper sell-off in the cross would open 0.8582, Apr 7 low and expose the Apr 5 low of 0.8472. Medium-term moving average signals are bearish, in line with the broader downtrend that has dominated since Sep 2020. A break of 0.8719 is required to reinstate a bullish theme.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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