Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. Since the end of October, the pair has been ever-so-slowly pushing downward, a trend that is likely to remain like that until the December elections in the UK.
At the moment, we can say that the British pound is a highly predictable instrument. The overall sentiment for the sterling is neutral: economic reports from the United Kingdom are sparse and hardly surprising, while the Bank of England has also opted for a wait-and-see approach until the elections. The pound has been making small, gradual recoveries in its price due to Boris Johnson’s Conservative Party showing a comfortable lead in all relevant exit polls for the December 12 elections. If the results match the polls, the UK will soon have a government that will be able to pass Brexit legislation without any resistance and “get Brexit done,” as Johnson is prone to saying.
As far as the eurozone is concerned, this week has been relatively quiet in terms of economic reports. Despite last week’s positive results in terms of inflation, employment, and GDP growth, the European single currency is under pressure due to the United States’ decision to impose tariffs on French goods. Trump may target other EU member states as well, which will have a negative impact on the European economy. Moreover, the lack of a trade agreement between the US and China is also affecting all financial markets negatively, including the EU.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8478, with the pair currently trading below it. The daily support levels lie at 0.8426 and 0.8399. The daily resistances are at 0.8505 and 0.8557. The indicators of technical analysis recommend a strong sell in the daily term.
