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Pound Retains Dominance Over Euro; EUR/GBP Targeting 0.8537

Novavax coronavirus vaccine Moderna
Novavax coronavirus vaccine

The Pound continued its dominance over the Euro on Monday, as traders have pitched their tents with the UK’s successful vaccination campaigns, in place of the largely disorganized vaccination regimens in Europe. Data released by the Commodities and Futures Trading Commission (CFTC) in its positioning report indicates that the Pound is seeing the highest levels
of speculative longs in 3 years.

The UK has been able to vaccinate 21 million people, is meeting its vaccination coverage milestones and is set to reopen schools on Monday in the first of the 4-stage reopening of the country’s economy. In contrast, the EU has not been as organized as the UK, with Austria having to stop the use of the AstraZeneca vaccine as a precaution after a nurse at the Zwettl Clinic died following her inoculation. The EURGBP is down 0.36% on the day.

Technical Levels to Watch

The pair has violated the 0.85952 support, but is yet to achieve the desired closing penetration to the downside to confirm the breakdown of this level. If this breakdown occurs, then the EURGBP would be on its way to 0.84883, with 0.85372 (24 February low and previous high of 4 February 2020) serving as a potential pitstop to the price decline. There is also potential for 0.8500/0.85043 to serve as a support level before 0.84883.

On the flip side, a failure to break down 0.85952 could allow for a short-term bounce that targets the channel’s trendline. A break above this trendline could enable 0.86811 to come into focus, along with 0.87349 (5 February low) and 0.87967 (9 February high), which could serve as potential targets to the north.

EUR/GBP Daily Chart