Today we would take a look at the EUR/GBP currency pair. Ever since a major drop in September 2017 the pair has been sporadically moving up and down. As of the beginning of March it seems to be in another downward channel.
Right now the euro isn’t faring too well. There is a lack of strong factors, either positive or negative. However, the current projections for inflation within the eurozone are not as good as they could be and the European Central Bank is still on edge because of that. This is why right now the euro’s pairs are influenced by other currencies’ performance.
On the other hand, the British pound is doing better than expected. Earlier today the newest report on inflation showed it dropped from 3% down to 2.7%, which is the lowest in over half a year. This is also partnered with wage growth, which bodes well for the economy. The Bank of England could still opt to increase interest rates in order to bring inflation closer to the golden level of 2%, but at least for now it seems that the economy is moving towards that level on its own. At the end of this week there will be another round of Brexit negotiations which would likely have a big impact on pairs with the GBP.
In terms of the daily chart, today we have a pivot point at 0.8788. Likely the pair will remain trading below it, so watch out for the support levels at 0.8753 and 0.8709. On the off chance that the pair starts climbing (which is unlikely today), pay attention to the nearby resistances at 0.8832 and 0.8867. The indicators of technical analysis agree on a strong sell signal.
