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Pound Rally Gets Nod From Signal That’s Been Right for a Decade

Pound Rally Gets Nod From Signal That’s Been Right for a Decade

(Bloomberg) -- There’s a technical pattern in the euro-pound pair that may bode well for sterling.

The cross’s 21-week moving average has fallen below its 89-week equivalent, an event that in the past ushered in average gains of about 2% for the pound over the course of almost three months.

Other than on Monday, this so-called death cross pattern happened just four times over the past decade, and the euro fell further on each occasion.

Pound Rally Gets Nod From Signal That’s Been Right for a Decade

There’s more bad news for the euro. The currency is on the verge of closing against the pound below its 55-monthly moving average for the first time since May 2016.

The euro-pound cross dropped a fifth day on Monday, the longest losing run since August, to 84.08 pence as of 11:59 a.m. in London.

--With assistance from Vassilis Karamanis.

To contact the reporter on this story: Dana El Baltaji in Dubai at delbaltaji@bloomberg.net

To contact the editors responsible for this story: Paul Dobson at pdobson2@bloomberg.net, William Shaw, Michael Hunter

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