EUR/GBP fails to confirm above 0.8800 and eases to 0.8785 area

• The euro, unable to breach 0.8800, consolidates gains at 0.8785.
• BoE's pledge to support UK economy does not aid the pound
• The pair fails to capitalize on the brad-based GBP weakness.

The euro has failed to break resistance area at 0.8800/20 on its third attempt over the last days. The pair, however, maintains a mildly positive tone and remains steady at the upper range of 0.8700.

BoE pledge to support economy fails to aid the pound

The Bank of England’s new set of measures to support economy announced earlier on Monday have not helped to shore the pound sterling. The cable remains offered across the board, and has reached fresh two-week lows against the USD.

The sterling has remained on the back foot for the past recent weeks after UK Prime Minister, Liz Truss disrupted markets with a plan to cut taxes and increase government spending, which sent the currency into a tailspin.

On the other end, the euro, with challenges of its own ,has been unable to capitalize on GBP weakness. The common currency is going through a steady downtrend against the US dollar, crushed by investors’ concerns about the economic consequences of the escalating war in Ukraine and the high energy prices.

EUR/GBP capped below 0.8810/20 resistance area

From a technical perspective, the euro is going through a near-term positive trend, which should breach above 0.8820 (October 6,7 highs) in order to build momentum and attack 0.8850 (Sept. 30 high, Sept 26 and 28 lows), which would open the path towards 0.9000 area.

On the downside, immediate support lies at 0.8740 (October, 7 low) and then probably at 0.8690 (Sept. 22 low). Below here there is an important level at 0.8625 (September 15 low), which could trigger a Head and Shoulders figure, potentially pushing the pair towards the 0.8400 area.

Technical levels to watch