Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair has been trading in an extremely narrow corridor ever since late October, largely due to the Brexit developments.
The British pound continues to be under the influence of political developments in the United Kingdom. Parliament was recently disbanded and the country is officially entering a five-week election campaign, to culminate in a vote on December 12. There will likely be no more relevant Brexit news until after the UK has a new government, one that come up with a clear position on the Brexit course they would like to take. Today the Bank of England is holding a policy meeting. If it chooses to hike interest rates, we will see a further strengthening in the pound, but the BoE will likely not make any changes until after the elections.
Things continue as usual for the euro. The ECB has been quiet and it is not expected to adjust its monetary policy anytime soon. Economic reports from the eurozone remain lukewarm to disappointing, but it is still too early in the month to see any benefits of the ECB’s renewed stimulus program.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8608, with the pair currently trading above it. The daily support levels lie at 0.8598 and 0.8584. The daily resistances are at 0.8622 and 0.8632. The indicators of technical analysis recommend a strong sell in the daily term.
