Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair has been moving in a flat trend since mid-October, and this is likely to continue in the near future.
The British pound’s position is quite uncertain due to the political developments in the United Kingdom. Though Prime Minister Boris Johnson managed to secure a deal with the European Union, his bill failed to proceed in Parliament and Brexit (which was supposed to happen today) is postponed once more. Normally, the pound strengthens when Brexit is delayed and a no-deal scenario is avoided. However, this week UK MPs voted in favor of preliminary elections to be held in December. As a result, we do not expect much political activity and any Brexit developments until after the elections, as Parliament will disband. It appears that it will be up to the next government to decide what to do about the United Kingdom’s exit from the European Union.
Meanwhile, the European single currency still lacks reasons to strengthen. The fact that a hard Brexit was avoided for now brought only a small relief to the European markets. Fundamentals published this week failed to meet investors’ expectations, however. The eurozone is struggling economically, which is not a problem that will go away soon. Therefore, the euro will remain weak.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8635, with the pair currently trading below it. The daily support levels lie at 0.8621 and 0.8598. The daily resistances are at 0.8658 and 0.8672. The indicators of technical analysis recommend a strong sell in the daily term.
