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Athens - The euro’s failure to rise above $1.09 provided momentum for the pound to reach the highest levels versus the common currency since the first round of the French presidential elections.
The euro has stayed below the $1.10 level broken on Monday given a lack of fresh catalysts, creating upside fatigue for euro-bulls who are preferring to fade dips rather than chase price action higher, according to foreign-exchange traders in Europe.
As the pound found fresh buying interest across the board ahead of the Bank of England’s Super Thursday, stops below 0.8400 versus the euro were triggered, said the traders, who asked not to be identified as they weren’t authorized to speak publicly.
The common currency dropped to its weakest level versus sterling since April 21, as bullish sentiment after the France vote evaporated and the market speculated that more BOE members could dissent on holding UK interest rates. Technical charts suggested bearish momentum.
Against the dollar the pound peaked at $1.2988 only to drop sharply near to its open level of the day, as leveraged short-term accounts had their intraday stops below $1.2950 filled, a Europe-based trader said. Stops entries lurk above $1.3000 and a rise above that psychological level could see substantial follow through.
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