Pound keeps a little higher but buyers need to do more to recapture upside momentum

Sterling keeps steadier after the correction to the upside move last week

EUR/GBP H1 03-01
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Cable has backed off earlier highs closer to 1.4000 as the pound loses a bit of its earlier momentum but is still keeping higher so far today.

The slight retreat also comes as we see EUR/GBP back off against a test of its 100-hour moving average (red line) and 5.0 retracement level of the swing move higher towards the latter stages of last week @ 0.8636-39.

For cable, dollar sentiment is also part and parcel of the equation and that is slightly underpinning the pair amid the better risk mood this morning.

However, for EUR/GBP, it reaffirms that despite the push back lower under 0.8700, sellers (pound buyers) still have more work to do in order to regain the upper hand.

For now, the key near-term levels highlighted above are proving to a be key impediment to that as the downside push in EUR/GBP stalls.

If sellers are able to keep below the 200-hour moving average (blue line) @ 0.8650, that will be a welcome sign to try and push the key support highlighted above.

But break above that and buyers (pound sellers) will still keep some ground in the latest corrective move seen since Thursday last week.

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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