Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair is currently more volatile than usual as the United Kingdom is undergoing a series of important Brexit votes, which are affecting the pair.
The British pound sterling is currently under a lot of stress. This week the UK Parliament has already voted twice: on Tuesday they rejected PM Theresa May’s deal to exit the EU, and last night they rejected leaving without a deal “under any circumstances” - which means not only on March 29, but in general. Today Parliament will vote on whether to ask for an extension to Article 50 and buy more time for the government to negotiate a better deal, which is the most likely scenario. However, the Prime Minister is still stubbornly insisting that her deal has a chance and has scheduled another vote on it next week, so right now it is unclear whether the UK will just opt to buy a few more months of negotiations or change their mind in the last minute and accept May’s largely unpopular deal.
Meanwhile, things for the European single currency remain as usual. Fundamentals are less than optimal and a weakness in the euro is persisting as the ECB continues to support the economy with a dovish policy. There are no internal factors that could push the euro towards growth at this time.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8546, with the pair currently trading above it. The daily support levels lie at 0.8452 and 0.8375. The daily resistances are at 0.8623 and 0.8717. The indicators of technical analysis and the moving averages are confident in giving us a strong sell recommendation.
