Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair has mostly stayed flat over the past week as the Brexit negotiations unfolded.
The British pound lately was under the influence of the Brexit developments. The sterling rallied after Prime Minister Boris Johnson secured a deal with the EU, but them slumped when the deal failed to gain Parliament’s backing. Johnson has since withdrawn the bill and has said he will organize a general election in the United Kingdom. Today, the European Union announced that it will grant the UK a three-month Brexit delay, which might be just enough for a snap election to take place. We expect the pound to stabilize because a hard Brexit was avoided once more.
Meanwhile, the European single currency continues to lack any concrete incentives to strengthen. Today there is a meeting of the European Central Bank but it is not likely to produce significant news. It is Mario Draghi’s last meeting as President of the ECB, so he might not want to announce any changes, leaving that up to Christine Lagarde instead. In general, the euro will most likely remain weak due to disappointing economic statistics from the eurozone.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8630, with the pair currently trading above it. The daily support levels lie at 0.8601 and 0.8586. The daily resistances are at 0.8645 and 0.8674. The indicators of technical analysis recommend a strong sell in the daily term.
