EUR/GBP Hovers Near Two-Week Lows Amid Risk-Off Market Mood

The EUR/GBP exchange rate has been hovering near two-week lows, around 0.8540, after Friday's sharp reversal from 0.8575.

This decline was largely attributed to Federal Reserve Chairman Kevin Warsh's hawkish message at Jackson Hole, which boosted hopes of upcoming interest rate hikes and led investors to believe that the Fed will honor its commitment to bring inflation back to the 2% target.

The risk-off market mood, fueled by rising tensions in Iran and increasing crude prices, is currently capping Euro rallies. As a result, technical analysis suggests that bears are eyeing the bottom of the last two weeks' trading range, just below 0.8550.