Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. Last week the pair managed to successfully climb to its highest level in a month (0.8586), but this week it rebounded from it and is trading mostly flat around 0.8560.
Right now the outlook of the British pound is a bit difficult to determine. The United Kingdom is seeing daily infection rates of over 30,000 Covid-19 cases per day, which are levels seen towards the end of this winter’s worst outbreak in the island country. However, thanks to a successful vaccination campaign, lethalities remain relatively low, as do hospitalizations. Thus, it doesn’t seem like the high number of active coronavirus cases will translate into new lockdowns, so the UK economy will most likely be safe this time around. Still, some of the most recent fundamental data out of the UK has been a little disappointing, and risk appetite hasn’t been very high among investors, which has hurt the pound a bit. But is this enough to give the euro an advantage?
So far, it seems like things can go either way for the European single currency. Economic reports from the European Union have been overall pretty positive, but there were a few hiccups here and there. Still, the performance of the eurozone has been a bit more consistent than that of the United Kingdom. Nevertheless, today we expect the release of the minutes from the ECB’s most recent policy meeting. Depending on whether this report brings any surprises or not, the euro might be affected.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8558, with the pair currently trading slightly above it. The daily support levels lie at 0.8544 and 0.8535. The daily resistances are at 0.8567 and 0.8581. The indicators of technical analysis agree in strongly recommending a buy position today.
