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EUR/GBP heads into key support as Brexit fears subside

EUR/GBP heads lower as the pound outperforms post-Covid. With key support in view, a break lower could open up a wider downtrend after eight months of consolidation.

EUR/GBP heads lower as Brexit fears dissipate

Fears surrounding what Brexit might exactly look like have hindered the performance of the pound over recent years. However, we are finally starting to see that anxiety subside to the benefit of the pound. With UK Covid-19 cases also finally turning lower, there is a growing of feeling of optimism that will likely see further downside for EUR/GBP.

EUR/GBP heading towards key support level

The daily chart highlights the declines seen over the course of the past week, with the pair currently trading at the lowest level since late November. That highlights the move towards a crucial support level in the form of the 0.8863 lows established in September and November. A break below that low would see the pair break from the eight-month consolidation phase that has been playing out. With that in mind, while we could see further short-term weakness come into play, it will take a break below 0.8863 to bring about a wider bearish signal for the pair.

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