Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The pair appears to be slowly but surely climbing up in price.
The British pound sterling remains entirely under the influence of the Brexit developments. Yesterday, UK Prime Minister Boris Johnson sent his proposal for a new withdrawal agreement to the European Union. The EU responded that while some of the ideas seemed promising and they could see the PM is willing to negotiate a deal, the current proposals are not enough. Most importantly, there are no solid alternatives to the Irish backstop in Johnson’s proposal, and that is the main issue.
Today Johnson will face the UK Parliament, where a heated debate is expected. The opposition has already slammed Johnson’s proposal, with Jeremy Corbyn actually stating that Theresa May’s deal was better. Johnson has only about two weeks to revise the proposal and add concrete ideas that the EU could back during their October 17 summit.
Meanwhile, the euro itself lacks any incentives to strengthen. Brexit is just as much an issue for the eurozone as it is for the United Kingdom. Besides that, the European economy is troubled by decreasing inflation and a slowdown in industrial production. Moreover, the United States announced tariffs for some European goods such as wine, cheese, and whiskey. The worsening trade situation is definitely not helping things.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8906, with the pair currently trading below it. The daily support levels lie at 0.8887 and 0.8867. The daily resistances are at 0.8926 and 0.8945. The indicators of technical analysis are mixed at the moment, but lean towards a buy suggestion in the daily term.
