Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. Since the beginning of last week the rate has been steadily increasing.
The British pound is weakening because of Brexit. The government of the United Kingdom has shown time and time again that they have no plan for handling the UK’s exit from the European Union. Prime Minister Theresa May was urged by her party this week to abandon the talks with opposition leader Jeremy Corbyn. Speculation about May’s departure is intensifying, as more time is ticking away on the Brexit clock. Even though the EUR has not been strong in a very long time, the pound is losing positions against it.
There are many factors that are preventing the euro from strengthening. First of all, data from Europe remains disappointing. There was a positive report from Germany this week, but it was quickly overshadowed by a lower GDP growth from the eurozone as a whole. Furthermore, while the euro received a temporary respite from the fears of trade tariffs from the United States, in a few months this concert will return, so it cannot be counted upon in the long term.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8710, with the pair currently trading above it. The daily support levels lie at 0.8682 and 0.8641. The daily resistances are at 0.8751 and 0.8779. The indicators of technical analysis are giving us a strong buy recommendation in the daily term.
