Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair right now is undergoing a lot of shock due to the recent Brexit developments.
The British pound sterling suffered a rapid drop in value on Wednesday. This was caused by Prime Minister Theresa May’s formal request of the European Union to postpone Brexit. May asked for an extension of the deadline from March 29 to June 30. However, EU officials stated that the UK has to choose between accepting an earlier deadline than that, or a much longer one (till the end of 2019) due to the European parliamentary elections, which are scheduled two months from now. Moreover, the British government appears to have lost whatever approval it held onto, as even the House of Commons’ Speaker decided to block a third vote on May’s deal as it is. The Prime Minister is meeting the leaders of all EU countries in Brussels today to discuss the matter of the extension further, but right now Brexit seems even more chaotic than it was last week, which is weakening the pound.
The euro, on the other hand, remains steady. The single currency still lacks any incentives to start growing, but with reliably predictable economic data, compared to the shock in the United Kingdom and the recent poorer-than-expected performance in the United States, the euro is actually emerging as a winner this week.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8625, with the pair currently trading above it. The daily support levels lie at 0.8584 and 0.8515. The daily resistances are at 0.8695 and 0.8735. The indicators of technical analysis are giving us a strong buy recommendation.
