Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair has recently experienced many small ups and downs, but right now it seems that the downward movement is more pronounced.
The British pound continues to be in a precarious position affected by politics and fundamentals. Prime Minister Boris Johnson’s aggressive tone regarding the trade negotiations with the European Union is adding mounting pressure on the pound. However, recent economic reports have been better than expected. For example, the GDP for the fourth quarter of 2019 surprisingly rose to 1.1% against the expected 0.8%. Trade balance data was also favorable. But while these results could provide a short-term boost to the pound against the euro, the sterling’s future is uncertain and many investors lean bearish on it.
Meanwhile, the European single currency has been struggling with fundamental disappointments. The German economy is underperforming, which reflects poorly on the eurozone, as Germany is the single strongest economy in the bloc. Today’s CPI reports from Germany met the forecasts, which isn’t bad, but is also not enough to boost the euro. Tomorrow will be the biggest day of the week for the euro, as the eurozone GDP reports will be published. Depending on whether they meet or exceed the forecasts, these results will likely decide the course of the EUR/GBP pair for the next week or so.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8401, with the pair currently trading below it. The daily support levels lie at 0.8374 and 0.8355. The daily resistances are at 0.8420 and 0.8447. The indicators of technical analysis agree on a strong sell signal.
