The EUR/GBP downtrend has stalled around 0.8550 for the last month, but the increasingly disparate outlook towards the economic recovery suggests the next leg lower is very close.
After a poor COVID-19 performance in 2020, the UK has handled the coronavirus rollout far more effectively than the EU. The UK has vaccinated over 30 million nS8N2K806P and is now cautiously unwinding lockdowns nL8N2LQ083, and plans for the second vaccination on track nL1N2LQ04O.
The conflict with the EU on vaccine supplies also looks close to a resolution nL1N2LP014.
Meanwhile, the EU is struggling with the third wave of coronavirus nL8N2LO2MM, as French doctors warn over rising intensive care patients nL1N2LQ0BE, and much of Italy remains in lockdown nL8N2LO4XT.
In Germany, Chancellor Angela Merkel wants states to get tough with COVID curbs nL8N2LQ0JR.
EUR/GBP has been driven by the outlook for the 2021 economic recovery, with coronavirus containment a pivotal factor.
Technically, 5, 10 & 21 daily and weekly moving averages trend south with 21 period Bollinger bands.
This is a strong bearish setup that would be confirmed by a sustained break of the March 0.8533 low.
EUR/GBP has been in a consolidation phase, but Friday was the first weekly close below 0.8569, 76.4% of the 2020 rise, which opens the door to the 0.8282 2020 base.
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