Pound-Euro Rejected Again

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Pound sterling has again failed to sustain gains against the euro after running into resistance at a key long-term technical level that has capped rallies throughout the year.

Pound sterling rose 0.43% on Wednesday to reach 1.1557 against the euro, a move that briefly lifted the pair back to its 200-day exponential moving average.

That level has once again proved decisive, with the exchange rate subsequently paring the advance to around 1.1532 as sellers re-emerged.

The 200-day exponential moving average matters because it is widely used by investors to distinguish between longer-term uptrends and downtrends, with moves above it often interpreted as a shift in underlying momentum.

When prices repeatedly fail at this level, it signals that longer-term holders remain reluctant to add exposure, even when shorter-term momentum improves.

This is not the first time the pound has been turned away at this point, having also been rejected at the 200-day EMA on January 06.

Since that failure, successive rallies have risen into the vicinity of the indicator only to be sold, reinforcing its role as a technical ceiling.

Such repeated rejections tend to entrench market behaviour, encouraging traders to sell into strength near the average while deterring fresh buying until a clear break is achieved.

A decisive close above the 200-day EMA would likely force a reassessment of positioning, opening the door to a more sustained recovery in the pound against the euro.

Until that happens, the technical picture suggests rallies remain vulnerable, with the moving average continuing to define the boundary between corrective rebounds and a genuine change in trend.