EURGBP exchange rate is in the doldrums but could that be the calm before the storm

The EURGBP exchange rate has been in the doldrums since late February and has effectively been moving sideways since then, albeit within a two big figure range.

Whether you think the rate has put the volatility seen in the previous two years behind it, probably depends on your view about the tail end of Brexit, and just how big a problem the Irish border question turns out to be.

The pound has gained +4.0% versus the Euro in 2021 compared to a +3.20% rise against the US dollar, for the UK currency.

EURGBP Forecast & Analysis

Given that the pound has made 29 new highs versus the Euro over the last 6 months you would have to think that momentum remains on sterlings side.

Technically EURGBP is below its 200, 100, 50 and 20- day moving averages yet it looks far from oversold on an RSI 14 basis.

If the pound is to continue strengthening against the single currency then EURGBP will need to break below, the one and three-month lows, at 0.855331 and 0.84718 respectively. After which the two year low at 0.82763 would be the next big level to aim at.

On the upside, we would need to take out the one month high at 0.86710 to have any realistic chance of making bigger gains, though the 6 month high of 0.92165 would be the long-term target if it could.

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