Pound-Euro Week Ahead Forecast: Consolidating Below 1.13 after Recovery Rally Scuppered

A sell-off in the British Pound ahead of the weekend accelerated on the release of data that showed the UK economy suffered a significant slump in January.

Pound Sterling is softer in mid-week thanks to a lack of fundamental drivers which has left markets more prone to technical considerations than has been the case of late.

The Pound-to-Euro exchange rate will go higher, in part owing to the UK's rapid vaccine rollout, according to a leading foreign exchange analyst.

The Pound-to-Euro exchange rate closed Friday with its first intraday decline for seven and may be susceptible to a further losses early in the new week, although it benefits from nearby technical support and fundamental tailwinds like an elevated trade-weighted Euro and faster coronavirus vaccinations in the UK.

The British Pound has arrived at a critical juncture in its recovery against the Euro, with the exchange rate hitting its head on a resistance level that has frustrated advances since June.

The Pound-to-Euro exchange rate has rallied in recent days and counts as one of Sterling's most noteworthy successes, although with the single currency now stalling in its advance against the Dollar, new highs could be in store for the British unit over the coming weeks. 

Demand for UK assets could be driving a more sustainable appreciation in the value of the British Pound according to two foreign exchange analysts we follow, which if true could suggest a bottom in some key exchange rates have been put in.