Image (C) Pound Sterling Live.

Following a strong run by the Euro against the British Pound over recent days, technical strategists are cautioning that the market might be getting a bit overheated.

Some recovery by the British Pound against the Euro therefore could be expected.

The Euro has been on the rise against the Pound for four consecutive days now meaning the Pound is nursing a 1.3% loss against the single-currency.

"Prices have pushed through channel resistance and with momentum still in bull mode there is room to test the next resistance region between 0.8975 and 0.9050. However, we don’t see any reason the market should push up through that region and, with momentum approaching overbought, we expect to see a pullback from there," says strategist Robin Wilkin with Lloyds Bank.

For those watching the market via the Pound-to-Euro exchange rate side, this implies that there is strong support between the 1.1142 and 1.1050 region. This suggests these might be targets to aim for in the event of further weakness as beyond here the going for the Euro becomes increasingly tough.

"However, a decline through 0.8900-0.8870 support is needed to suggest a more significant turn back into the range around 0.8800 and potentially a re-test of the 0.8720-0.8690 range lows. For now, the greater risk is to merely range at these upper levels," adds Wilkin.

0.8900-0.8870 support in EUR/GBP translates into resistance at 1.1236-1.1274 for the GBP/EUR in the event of any comeback move; scope for Sterling advances are therefore clearly limited. The 0.88 range refers to 1.1360 in GBP/EUR - a level the exchange rate had been comfortable with for many weeks until the recent declines were triggered by growing fears over a 'no deal' Brexit.

Elsewhere, strategists with Swissquote Bank say they expect the Euro's upside move against the Pound to prevail.

"The break above 0.8925 is a positive signal that has opened a path to 0.8965," says a note from the Gland, Switzerland-based bank.

The "path to 0.8965" referred to translates into expectations for a decline to 1.1154 in GBP/EUR which is the 2018 low set on March 07, a target many in the market are eyeing.

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