MUFG Research discusses EUR/GBP outlook and adopts a neutral bias in the near-term.
"The latest IMM report revealed that Leveraged Funds had built up implied short EUR/GBP positioning in March to the highest level since April of last year. The forced unwinding of those positions has likely exacerbated the size of the move higher in EUR/GBP in recent days from an intra-day low of 0.8472 on Monday to an intra-day high yesterday of 0.8664. It has been the largest rise for the pair in percentage terms since the down trend began in mid-December," MUFG notes.
"The price action suggests that risks are become more balanced after the sharp move lower in Q1 which brought EUR/GBP back towards pre-pandemic lows between 0.8400 and 0.8600," MUFG adds.