EUR / GBP Price analysis and news
THE VACCINE TRADE IN TOTALLY FOR BULLS GBP
The British Pound has gotten better and better in recent sessions with the booming vaccine trade, in which the EUR / GBP is now trading at its lowest level since May 2020. The UK government has had some success rare with its vaccine rollout program, whereby 4.6 million people received their first dose of the COVID vaccine yesterday. As can be seen in the graph below, the number of doses administered per 100 people is significantly higher in the UK at 7.47 compared to the rest of the G10 countries, especially compared to the EU which follows at 1.45.
THE UNITED KINGDOM WINNING THE VACCINE RACE
Source: Our global data
of customers are net long.
of customers are net short.
EUR / GBP ENTERING A NEW RANGE
That said, with the UK leading the vaccine race, the outlook looks rather optimistic for the UK economy to rebound. In turn, comparing with the less successful rollout program for the EU, which had to cut shipments of Pfizer’s COVID vaccines, the EUR / GBP seeks to further expand the losses. As I noted in our GBP guidance for Q1 2021, a break below support at 0.8860 could see cross trade in a new range of 0.8600 to 0.8800. Keep in mind that with a huge cloud of uncertainty over the now eliminated Brexit, the GBP has become even more attractive against the EUR, which had long been a guide for Brexit sentiment.
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Download our new forecast for the first quarter of 2021 in GBP
With a clear break below key support at 0.8860, the next level of interest is around 0.8750, coinciding with the rate of 61.8%, below that level and downside risks could extend towards 0.8700, while rebounds at 0.8860 and 0.8900 are likely to be washed out. Elsewhere, for those who prefer their techniques, a 50 / 200DMA death cross suggests that the risks are on the downside for EUR / GBP.
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