Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair has continued to climb and is currently close to 5-month highs.
The British pound is currently influenced by a negative sentiment in the United Kingdom. Last week the Bank of England gave an indication that they are pessimistic about the UK’s economy, especially in light of the global economic slowdown and the risks associated with Brexit. With no clear Brexit plan in sight, tensions are rising and a hard Brexit remains on the table. Currently the G20 summit is the main event influencing the pound, as a reconciliation between the US and China will be good for the sterling. Moreover, tomorrow we expect GDP data from the UK that will tell us more about the health of their economy.
The European single currency is in a similar boat. The EUR weakened slightly after the European Central Bank announced that they are ready to implement a new round of stimulus measures, though they haven’t committed to that plan yet. Today and tomorrow we expect the consumer price index reports, which will be very telling of whether the EU needs more help from the ECB or not.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8959, with the pair currently trading below it. The daily support levels lie at 0.8941 and 0.8924. The daily resistances are at 0.8977 and 0.8994. The indicators of technical analysis are confident in giving us a strong buy recommendation.
