The Brexit deal and the divergence in vaccine timelines has led to four months of non-stop selling in EUR/GBP but the pair has bounced today, climbing 1% for the first time in 2021.
The chart shows a break higher on a poorly-defined downtrend. I would be careful about looking for more, at least until the series of lower higher is broken on a rise above 0.8645.
The gains come in a broad relief rally for the beaten-up euro. There are some tentative signs that this wave in the pandemic is ebbing and the vaccine rollout should accelerate in the months ahead so that could be part of the story. In spite of all the setbacks in Europe this year, the IMF upgraded its GDP forecast for the eurozone this year on economic resilience.
In terms of sentiment, the euro is hated almost universally so there's plenty of room for improvement on that front.