Pound to Euro Rate Finally Cracks Resistance
- Written by: Gary Howes
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Break of key technical level is a seminal moment for the pair.
The pound to euro exchange rate (GBP/EUR) has climbed to 1.1580, marking its highest level since August as sterling extends a broad-based recovery.
The move leaves GBP/EUR firmly above its 200-day exponential moving average, which is located at 1.1555, placing the bulls on the right side of a key long-term technical threshold.
A break above the 200-day EMA is significant in technical lore because it is widely used as a dividing line between longer-term downtrends and uptrends, with sustained moves above it often interpreted as a signal that underlying momentum has shifted in favour of buyers.
When a currency pair clears this level after repeated failures, it can trigger follow-through buying as trend-following strategies adjust positioning and previous sellers step aside.
The bullish impulse seen on Monday has already filtered through to retail pricing, with fee-free money transfer providers now offering exchange rates just above the 1.1550 level.
Gains in GBP/EUR have been closely linked to a solid recovery in global equity markets, a relationship that reflects the pound’s sensitivity to shifts in risk appetite.
GBP/EUR is considered a high-beta currency pair relative to stocks, meaning it tends to amplify moves in equity markets, rising more strongly when equities rally and underperforming when risk sentiment deteriorates.
“The currency’s pro-cyclical nature boosted demand, and this was reinforced by a compelling technical break. The pair had repeatedly tested resistance at 1.1550 throughout December before finally pushing above it,” says Antonio Ruggiero, analyst at Convera.
Attention now turns to Thursday’s interest rate decision from the Bank of England, which represents the next potential catalyst for sterling.
Even so, provided the global investment mood music remains supportive, the technical break above the 200-day EMA suggests the pound can continue to find support against the euro in the near term.
