The Euro (EUR) is trading higher against the British Pound (GBP) on Tuesday, trimming losses after depreciating more than 1% in a bit more than a week.
Euro bulls, however, remain capped below the 0.8640 area so far, which leaves the pair trading within Monday’s range, and keeps its broader bearish trend intact
Hawkish comments by European Central Bank (ECB) Chief Economist Philippe Lane, who endorsed market expectations of upcoming rate hikes earlier on Tuesday, have failed to provide any significant support to the Euro. The Pound, on the other hand, remains fairly resilient to the UK’s uncertain political scenario, although the low yield on UK Gilts amid fading hopes of Bank of England (BoE) monetary tightening, as well as a somewhat more cautious market, are keeping Cable’s upside attempts limited. Technical Analysis: Euro bears remain in control EUR/GBP trades at 0.8634, with the near-term bearish structure still in place and momentum indicators pointing to moderate bearish pressure.
The Relative Strength Index (RSI) has bounced up from oversold levels, but remains within negative territory. The Moving Average Convergence Divergence (MACD) has inched back into positive territory, yet hints at a consolidative, neutral bias, rather than at a trend shift. Initial resistance lies at a previous support in the 0.8640 area (May 21 low).