The pair is volatile today, but we can try selling it.
Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The euro has been making moderate gains against the British pound sterling in the past week, shaking off the previous weakness of the single currency.
To begin with, the euro continues to be in a neutral state. There are no incentives for growth coming from the European Central Bank who have been consistent in their approach to monetary policy. There aren’t even that many economic reports expected this week that could affect the European single currency seriously. An important event concerning our pair is this week’s summit of the European Council in Brussels. Yesterday Brexit negotiations were on the agenda, but the British PM left the meeting without speaking to media, and today the EU leaders have moved onto other topics such as security, refugees, and the environment.
The British pound is most likely to weaken against other currencies, the euro included, if this round of Brexit talks fails to produce a deal. As the United Kingdom is moving closer to a hard Brexit, analysts are raising their concerns for the British economy, and this will be reflected in their national currency. Moreover, the retails sales report from the UK today did not meet the forecasts of analysts; we are still awaiting several other reports, but nothing that can have a dramatic impact on the pound.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8780, with the pair currently trading around it. We expect the EUR/GBP to drop in the daily terms, so look towards the nearby support levels at 0.8750 and 0.8730. The daily resistances are at 0.8800 and 0.8830. The indicators of technical analysis recommend a strong sell position.
