Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair has had a shaky movement over the past few weeks, but right now it seems to exhibit a bullish bias.
The British pound is still weakening due to politics in the United Kingdom. Last week Parliament backed Boris Johnson’s withdrawal agreement, confirming that the United Kingdom will exit the European Union on January 31. However, the Prime Minister has added a new level of uncertainty to the Brexit issue thanks to his decision to cut down the transition period until the end of 2020. Now investors will have to keep an eye on the trade negotiations between the UK and the EU throughout the year, as it is possible that they will fail to reach an agreement in such a short amount of time.
Things remain the same as ever in the European union. The euro has had an extremely quiet week due to the markets closing down for Christmas. Therefore, there have been no incentives for the strengthening of the euro. Moreover, the ECB will remain cautiously dovish at the start of 2020, so realistically, there are no reasons to expect the euro to strengthen.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8560, with the pair currently trading below it. The daily support levels lie at 0.8529 and 0.8503. The daily resistances are at 0.8586 and 0.8617. The indicators of technical analysis recommend a strong buy in the daily term.
