- The euro extends gains against the pound during the US session.
- EUR / GBP is heading for weekly gains after a strong rebound.
The EUR/GBP extended the rally and rose to 0.8717, reaching the highest level since April 16. The euro remains at the top of the range with the positive tone intact.
On Monday, EUR / GBP is trading below 0.8600 before starting a rally that picked up speed on Thursday and Friday. Not even risk appetite weakened the bullish move. Economic data from the UK and the Eurozone beat expectations on Friday. The positive tone around the euro continues to push the EUR / GBP higher.
EUR / GBP returns above 0.8700
If the euro manages to stay above 0.8700, it could set the stage for an extension of the rally from the 0.8470 floor. The next resistance is seen around 0.8730. A pullback below 0.8700 would ease the bullish pressure, and below 0.8600, the pound would be ready for a further bullish leg.
Credit Suisse analyst notes that if EUR / GBP sustains above 0.8721 / 32, it would establish a potential ‘head and shoulders’ base “to mark a more significant turn to the upside with resistance initially seen at 38.2. % retracement of the decline from December at 0.8761 before 0.8793 / 99 and then more importantly at the ‘neckline’ to the medium-term high at 0.8851 / 61 “.
Technical levels
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