- EUR/GBP witnessed some short-covering move on the first day of a new trading week.
- COVID-19 jitters undermined the British pound and remained supportive of the uptick.
General overview: The EUR/GBP cross maintained its bid tone through the mid-European session and was last seen trading around the 0.8910-15 region, below the daily tops set earlier this Monday. The cross witnessed some short-covering move on the first day of a new trading week and recovered further from November 2020 swing lows support. The British pound’s relative underperformance against its European counterpart could be solely attributed to the imposition of fresh restrictions in the UK. the optimism over the rollout of COVID-19 vaccines could lift any further losses for the sterling and cap gains for the EUR/GBP cross. Concerns about the economic fallout from the continuous surge in new COVID-19 cases weighed on investors’ sentiment. The risk-off mood drove some haven flows towards the US dollar and weighed on the shared currency.
Technical Analysis: From the technical point of view we can say that market we create bearish signals in the market. The pair is looking for the downside momentum in the pair and creating more negative volatility in the market. The market is bearish signals for the sellers. On the daily chart, we can see that the pair is forming the rounding top and creating the recent sell signals the major SMA lines broken and lying above the EMA lines. The RSI also below the 50 lines and create the sell signals and the MACD also below the zero lines and create the sell signals. On the 4 hourly charts, we can say the market creates downward side swings in the market.
The support of the market is 0.8836 followed 0.8786 and resistance is 0.8936 followed by 0.8986
Trade idea : we can conclude that market will set towards the sell side so we can give sell at the level below 0.8869 and target will be 0.8719-0.8619 and stop loss is 0.8969.
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