EUR/GBP eases a little lower on the day, keeping the pound bid
The pair has made a good run in breaking higher over the past week but the upside move appears to be running into a bit of a roadblock for now. The 200-day MA (blue line) is a key line in the sand and that is limiting gains in trading today.
With the pair easing back towards 0.8700, it is helping to give the pound a minor lift with cable also looking towards testing the 1.2800 level to start the European morning.
A key spot to watch will also be how the euro continues to perform against the dollar after the pair ran into a key trendline resistance just under 1.1200 and backed off.
The market continues to sit in a bit of a tricky spot with regards to virus concerns, as to whether or not central bank stimulus can help to alleviate the pain seen last week.
If the virus outbreak continues to stay the course, it is easy to write off any central bank help because it will do little to help restore economic confidence since monetary policy does not address the more systemic issues posed by the virus.
But that doesn't mean that the market will not see some room for optimism if we see more major central banks follow the RBA in the coming days/weeks.
The risk for buyers in EUR/GBP is if price action begins to dive back below 0.8700 and under the 38.2 retracement level @ 0.8677 for starters. The euro has enjoyed a good time in the sun over the past week or so but perhaps there is room for some pause for now.
