FXStreet (Córdoba) – EUR/GBP is falling modestly on Monday after posting on Friday the highest daily close in a year. The euro has been rising constantly since early December against the pound, breaking key resistance levels. Currently the pair trades around 0.7620/30, 25 pips below last week close.
Momentum still favors the bullish bias and also the trend. On the negative side for the euro, technical indicators point to extreme overbought readings.
To the upside, the next relevant resistance above the psychological 0.7700 is located around 0.7750/70 (2012 lows). The euro could remain strong as long as it holds above 0.7500 – 0.7450, the area that during most of 2015 offered resistance.
Karen Jones, technical analysts at Commerzbank, notes that the EUR/GBP broke a major resistance at 0.7555/75 and also at 0.7614 (the 23.6% retracement of the move down from the 2009 high) and warns that the 2012 low is likely to offer a formidable resistance.
In the short term, price action moves could be determined by the next economic numbers and events.
Key data ahead
Tomorrow inflation data from the UK (09:30 GMT) and also from the Eurozone (10:00 GMT) will be released. On Wednesday in the UK, labor market data will be published and of Friday the retail sales report. The last economic report of the week from the euro area will be the preliminary PMI lecture on Friday that is expected to show a modest decline but still significantly above the 50 mark.
The most relevant event will be the European Central Bank meeting. No change in rates is expected. Mario Draghi’s press conference will be watched closely and is likely to have an impact on the euro.
(Market News Provided by FXstreet)