Weakness in the pound continued on Wednesday as GBPEUR fell to the low €1.15s during the European afternoon session. The recent soft spell has taken many by surprise considering the price was trading above €1.18 on Monday.
The movement lower does not appear to be driven by fundamentals nor economic data but does display the signs of a potentially large order (government or institutional) that has been worked over several days. Yesterday afternoon saw a sharp almost 1 cent sell off in both the GBPUSD and GBPEUR pairs. This took place over 1 hour, following which, a substantial bounce was seen. The following 24 hours of trade will be interesting for the pound which could see a bounce if the short-term selling subsides, which yesterday’s price action could suggest.
Today sees German factory order data, US jobless claims, and a speech from Federal Reserve Chairman Jay Powell.
Written by Viv Savani. 8:46am, April 8th 2021
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