Euro-pound reaches fresh annual lowsEuro vs. Great British PoundFX:EURGBPMichael_Stark_ExnessThe pound made strong gains on 15 July against most major currencies including the euro as participants expected less of a lurch leftward by the incoming British government under Andy Burnham. The ECB seems to be broadly more hawkish than the BoE with a hike by the former likely in September, but the difference in rates remains 1.25% in favour of the pound, so the carry trade in itself will probably continue to pressure euro-pound lower. Although the downtrend now seems obvious, this situation is challenging for new sellers because the price is so strongly oversold. With volume having been mostly steady since last month, selling around the lows seems even more questionable than usual. The 61.8% weekly Fibonacci retracement is also a possible support. A bounce to around 85p or at least a move out of oversold based on Bands and the slow stochastic might derisk the entry somewhat. The 50% Fibo around 85.4p is a possible resistance and might cap any potential bounce to come, but basic fundamentals don’t support an ongoing strong bounce. Apart from the British job report and inflation coming up on 21 and 22 July respectively, traders will also watch the ECB’s press conference on 23 July closely. This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.