Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The downward trend that started on May 26 is still continuing, though there are the occasional corrections that interrupt it. The pair is currently trading at its lowest level since early April.
There is not much new to report on the British pound. The United Kingdom remains steadily on the path to economic recovery, thanks to its speedy vaccination campaign, among the fastest in the world. The country is now reaping the benefits of being ahead of everyone else, despite a prolonged lockdown decision. Prime Minister Boris Johnson pushed the final easing of coronavirus restrictions to the end of July due to the arrival of the Delta form of Covid-19, hoping to vaccinate millions of people more before the full reopening. PMIs from the UK were slightly disappointing this week but did not dent the pound all that much. Today there was a policy meeting of the Bank of England but despite improving fundamentals, all members agreed unanimously not to change the interest rate. The QE also remained the same. So for now, the pound will remain strong as well, in the absence of any destabilizing factors.
The euro, meanwhile, finds itself on the losing end of this pair not through any fault of its own. The situation in Europe is overall quite good, and economic reports are signalling that a recovery is underway, if this week’s PMIs are to be believed. Plus, the region can count on continued support by the European Central Bank, so things are set to continue getting better. But the UK is simply a bit further ahead in its recovery, so the pound is likely going to hold onto its positions against the euro for now.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8544, with the pair currently trading above it. The daily support levels lie at 0.8523 and 0.8506. The daily resistances are at 0.8560 and 0.8583, both overcome. The indicators of technical analysis agree in strongly recommending a sell position today.
