After the first week of 2021, the state of EUR/GBP is not an encouraging one. It seems stuck somewhere due to recent lock down. Pound has forced the traders to get buyer support. Both the currencies of this pair do not seem attractive at all; still EURO was able to under perform GBP in the last week. The current trend of this pair is bullish.
Lockdown & EUR/GBP:
Another terrifying wave of pandemic has resulted in another alarming lock down. Thus the New Year fails to support GBP as this restriction in the beginning of 2021 has led to a pullback in the demand of Pound. Lock down is used as a tool to face off pandemic but at the same time, it is pulling currencies down. GBP is not the only victim; rather the entire Forex market is thriving to survive. Despite the negative and discouraging scenario, GBP has still managed to perform well in G10 group. This is the crucial supporting factor that is hindering the falling value of EUR/GBP.
The Measures of bank of England and GBP:
However the situation is not that hopeful for GBP as Central Bank has decided to take some severe measures to minimize the effects of this recent lock down on the British economy. One of these measures includes a reduction in the rate which will eventually affect GBP. Thus the economists and traders predict that in the next month, this negative rate will further drag the value of GBP. But you cannot rule out the fact that the current restriction is not just the issue of a single country. Thus it will likely affect the entire Forex market. So in the long term scenario, you can expect an extended bullish trend of this pair. The support area will be 0.8836 for this pair as 62% of the traders are right now net short.