Euro rises on Monday on the back of hawkish comments.EUR/GBP finds support again at the 0.8570 zone.
The EUR/GBP is rising sharply on Monday, boosted by a stronger Euro across the board. The cross peaked at 0.8675, hitting the highest level since Wednesday. It is hovering around 0.8560, up more than 50 pips for the day so far.
Key support at 0.8570
Last week and also during October, the 0.8570 area capped the downside. The mentioned area continues to be a critical support that if broken would open the doors to more losses, targeting the 0.8500 area.
As long as the cross remains above 0.8570, losses seem limited. On the upside, the crucial resistance is seen at 0.8690/0.8700, the convergence of horizontal levels and the 20-day Simple Moving Average. A break above would strengthen the outlook for the euro.
Hawkish comments from ECB officials
European Central Bank President Christine Lagarde testified before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament. She reiterated that interest rates will remain their main tool for fighting inflation. Earlier on Monday, ECB Governing Council member Klaas Knot pointed out that more tightening was necessary.
The comments boosted the euro across the board. EUR/USD hit a fresh multi-month high before pulling bank modestly while EUR/CHF peaked at 0.9888, a one-week high.
EUR/USD drops below 1.0400 as US Dollar rebounds
EUR/USD has lost its traction in the second half of the day and declined below 1.0400. With Wall Street’s main indexes pushing lower after the opening bell amid renewed China coronavirus jitters, the US Dollar started to gather strength and forced the pair to turn south.
GBP/USD declines toward 1.2000 amid risk aversion
GBP/USD came under heavy bearish pressure and declined toward 1.2000 in the American session on Monday. In the absence of high-impact data releases, the renewed US Dollar strength and the negative shift witnessed in risk mood force the pair to stay on the back foot.
Gold weakens after finding resistance at $1,760.00
Gold is falling on Monday after being unable to hold onto gains. It hit a fresh weekly high at $1,763.65 and then turned to the downside. The US Dollar opened the week higher, then it tumbled, but it recently gained momentum again on risk aversion.