Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. After a sharp decline in October, the pair has been trading in much flatter, consecutively lower channels.
Right now, the British pound sterling remains neutral versus other currencies as the country prepared to hold general elections on December 12. All forecasts expect the pound to remain stable because the results from the elections seem predictable. At the moment, all polls show an easy win for the Conservative Party, which would allow PM Boris Johnson to proceed with his Brexit plans without any strong opposition. In all likelihood, we shall see the United Kingdom leave the EU with Johnson’s withdrawal agreement by the end of January, which would finally eliminate all the back-and-forths of Brexit. Besides that, there are no important data releases to concern the GBP this week.
In the European Union, we have a data-loaded week. Today we expect the CPI from Germany, the strongest economy in the bloc. If the numbers are better than expected, we may see the euro rally. This data will be further complemented by tomorrow’s unemployment report from Germany, as well as the eurozone-wide CPI. All of these releases provide a chance for the euro to strengthen, but investors are not too optimistic about the European economy overall.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8531, with the pair currently trading below it. The daily support levels lie at 0.8478 and 0.8446. The daily resistances are at 0.8563 and 0.8616. The indicators of technical analysis recommend a strong sell in the daily term.
