Both the euro and the pound are currently weak against the dollar. Considering the general downtrend of EUR/GBP, which formed at the beginning of 2021, the current growth of the pair should be considered as a correction for now. It may still continue to the resistance levels of 0.8450, 0.8480. However, trends don't break that quickly. Therefore, it is logical to place additional pending sell orders near the above resistance levels.
The euro may strengthen if the ECB raises rates more significantly than markets expect, economists say, for example, if the key interest rate of the ECB exceeds the level of 1.5%, which is already taken into account by markets as a maximum for the next 1.5-2 years.
Otherwise, the euro will remain under pressure. Events in Ukraine could be a stagflationary shock for Europe, slowing economic growth while pushing up prices. This, according to many economists, makes it harder for the ECB to roll back stimulus measures to regain control of inflation without undermining the economic recovery.
In the meantime, EUR/GBP is growing, including due to the continuing weakening of the pound. A number of weak macro statistics, received from the UK last week, continues to overshadow the outlook for the British currency.
EUR/GBP hit 0.8414 last Friday and the pair continues to rise today. As of this writing, EUR/GBP is trading near 0.8430 moving towards key resistance at 0.8450
Support levels: 0.8412, 0.8400, 0.8380, 0.8350, 0.8336, 0.8310, 0.8260, 0.8230, 0.8200, 0.8145
Resistance levels: 0.8450, 0.8480, 0.8510
*) see also “Technical analysis and trading recommendations” -> Telegram
**) Get no deposit StartUp bonus up to 1500.00 USD
Source: InstaForex
