EUR/GBP with a quick push from 0.8590 to 0.8620
The pair had its best showing this year in trading yesterday, rebounding back above 0.8500 after having seen a steady decline throughout the past three months or so.
The jump also sees buyers take out the trendline resistance stretching back to the start of the year so that is an encouraging note and now the 0.8600 level is also broken.
As things stand, it looks like the pair is just coming up for some air after the unrelenting downwards pressure throughout the year so far i.e. profit-taking.
In turn, this is also weighing on the pound against other major currencies as well with cable seen slipping back under 1.3800 to start European morning trade today.
Going back to EUR/GBP, there is still short-term resistance around 0.8640-45 and that will pose a key test for buyers in extending the upside push further this week.
A break above that may see the corrective move extend further towards 0.8700 and potentially targeting the 26 February high @ 0.8731.
Looking at the fundamentals though, the UK continues to keep with the optimism from the vaccine rollout as the economy gets ready to reopen some time next month with talk of also restarting international travel.
That has to be tied to economic data in the latter stages of Q2 to be more convincing but the layout for what to expect is clear and widely anticipated by the market already.
On the other hand, the EU has plenty of surprises to offer if it can turn the vaccine narrative around. The report on a faster rollout yesterday here may provide some scope for optimism but it could still run into a reality check in the weeks ahead.
If the region can stick with that timeline though, that bodes well for reopening prospects ahead of the summer - which in turn is a tailwind for the euro.
But if there continues to be more setbacks and overestimations by EU politicians, the same issues may stick with the euro going into Q3 and the latest push higher in EUR/GBP may be what it looks to be i.e. a mere correction.
