Pound Stalls Against Euro Amid Hawkish Dollar
The pound-to-euro exchange rate has stalled at a short-term support line, but further weakness in the US dollar could bolster the pair. On Friday, the pound sterling's pullback against the euro was halted at 1.1680, which is above the 21-day moving average of 1.1679. This average has been falling since July and has flattened over the past fortnight.
The 100-day moving average is at 1.1613 and rising steadily, indicating that the medium-term support beneath this market climbs towards the current price while the short-term resistance above it falls. Analysts note that a falling short-term average means the ceiling comes down, allowing the pair to clear it without rallying.
The dollar's reaction to Federal Reserve Chair Kevin Warsh's speech at Jackson Hole was seen as hawkish, which has helped GBP/EUR gains. However, a follow-through USD strength could encourage further GBP/EUR gains, as Warsh cited solid consumer and business investment spending as indicative of a resilient economy.