EUR/GBP rebound from 0.8693 finds resistance at 0.8755

• EUR/GBP bounces up from 0.8693 lows favoured by pound weakness.
• Market concerns about the COVID-19 lockdown in the UK are hurting the pound.
• Longer-term, the EUR/GBP remains negative trading right above 7-week lows.

The euro has staged a solid recovery on Wednesday’s European trading session bouncing up from 0.8695 but it has been unable to extend above 0.8755. The pair has lost ground during the US session, retreating to 0.8725 area so far.

Pound weakens on COVID-19 lockdown concerns 

The EUR/GBP has taken advantage of a weaker sterling, which has lost ground against its main rivals, weighed by market concerns about the impact of Coronavirus on the UK economy. With the main economies starting to draft plans to lift their restrictions, the UK, which is expected to have one of the worst death tolls in Europe, is lagging behind with no signs of easing at sight.

The euro has been also favoured by brighter market sentiment today, with the main stock indexes trading in the green, while the German CPI figures have shown a positive surprise. In this context, safe-haven assets like the dollar have lost ground in favour of riskier assets like the euro.

EUR/GBP remains weak, near 7-week lows

Despite this short-term recovery, the pair remains bearish on longer-term charts. The 4-hour chart shows the pair capped below the 50 and 100 SMAs, trading close to a key support area at 0.8680/90, which has been holding bears for the last seven weeks. On the upside, the euro should confirm above the mentioned moving averages, right now around 0.8745 to ease bearish pressure before aiming for 0.8770 (April 24 high) and then 0.8865 (April 21 high)