Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. Despite some minor fluctuations, the exchange rate for this pair continues in the overall bullish trend which began in May.
The British pound managed to recuperate some of its recent losses based on better-than-expected economic reports for the previous month. However, Brexit continues to pose a threat for the long-term strengthening of the GBP. In the coming days we would know who the next Prime Minister of the United Kingdom will be, and this will offer more clues as to the type of Brexit we’d see. Investors fear that hard Brexiteer Boris Jonhson will inherit the office, as his positions might be bad for the UK economy.
The European single currency continues to struggle. The forecasts for economic and inflation growth of the European Commission have been lowered, as the global slowdown and the threats of an extended trade conflict with the United States paint a grim picture of the future. Today we would hear from the ECB, who are expected to announce another round of stimulus measures.
In terms of the daily chart, today we have a pivot point for the pair located at 0.9000, with the pair currently trading very below it. The daily support levels lie at 0.8986 and 0.8969. The daily resistances are at 0.9016 and 0.9031. The indicators of technical analysis are confident in giving us a strong buy recommendation.
