Pound-Euro Week Ahead Forecast: Tests 1.15, Discounted Sterling Looks for Bargain Hunters

The British Pound is on course to record its sharpest weekly decline against the Euro since September 2020, a time when the EU and UK faced a logjam in Brexit trade negotiations that lead markets to raise bets a 'no deal' outcome was increasingly likely.

The Pound-to-Euro exchange rate reached new one year highs above 1.18 to open the new week and was close to the middle of a 1.17-to-1.20 trading range that could be set to define price action for Sterling during the weeks ahead.

The Euro was seen trading higher mid-week with analysts saying at least some of the gains can be attributed to a member of the European Central Bank saying emergency measures introduced to deal with the pandemic could be fazed out as soon as September.

The Pound-to-Euro exchange rate reached one-year highs this week, at or above which it's likely to remain in the months ahead, according to new forecasts from Rabobank.

"Potential positive GBP seasonality in April may help EURGBP to break 0.85 resistance level" - Barclays.

The British Pound is up 4.50% against the Euro already this year courtesy of a combination of faded Brexit-linked risks and expectations for a strong vaccine-lead economic rebound over coming months, developments that underpin a strong technical picture that continues to advocate for further gains.