- Euro reversal from 0.8789 finds support above 0.8700.
- The EUR/USD remains trapped between 0.8700 and 0.8800 for the fourth week in a row.
- On the mid-term, FX analysts at Rabobank see the euro breaking the channel upwards.
The euro’s reversal from Thursday’s high at 0.8789 has been contained above 0.8800 on Friday which leaves the pair moving sideways, trapped within a 100 pip range for the fourth consecutive week.
EUR/GBP remains neutral with euro and pound underperforming
The EUR/GBP remains trading sideways reflecting the overall weakness of the euro ad British pound. The common currency has been hit by the German high court ruling, calling the ECB to justify bond purchases which has triggered concerns about the Bank’s monetary policy plans to shore up the EU economy.
The pound, however, has failed to take advantage of a softer euro. With the UK lagging most European countries to start easing COVID-19 restrictions and with Brexit uncertainty still looming, UK’s mid-term economic outlook remains shady. This is weighing the pound across the board.
FX analysts at Rabobank see the pound vulnerable in the mid-term
According to the Rabobank FX analysts’ team, the current standoff could end with the euro breaking higher, “Given concerns that the future arrangements between the UK and the EU may not be resolved by June, we expect GBP to be under pressure. We see EUR/GBP at 0.88 on a 1 to 3-month view with upside risk.”
EUR/GBP Key levels to watch