Many reports are expected today, so the pair will be volatile.
Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair was climbing steadily up until yesterday, but today it opened on a huge loss.
First off, the movement of the European single currency is likely to remain pretty neutral. Fundamental economics data from the eurozone is by no means disappointing, but since the budgetary conflict between Italy and the EU remains unresolved, it is a source of insecurity. Moreover, the European Central Bank hinted that they might have to implement a new program in 2019 to support the economy if Italy continues to cause trouble. That’s not confirmed yet, but if it comes to that, the EUR will weaken.
The British pound, on the other hand, continues to be affected by Brexit. No significant progress in the negotiations has been made, which is hurting the economy. Earlier today data on housing and the manufacturing PMI of the United Kingdom was released which was worse than forecasted. We also expect a number of other reports today, including info on inflation and an interest rate decision by the Bank of England.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8879, with the pair currently trading safely below it. The daily support levels lie at 0.8826 and 0.8790. The daily resistances are at 0.8915 and 0.8968. The indicators of technical analysis are showing us mixed signals and lean towards a buy, while the moving averages are confident in a strong sell.
