Today we would focus on Europe as we take a look at the EUR/GBP currency pair. Throughout the month of August so far the euro has been consistently taking on the pound, pushing the price upwards.
Right now analysts do not expect any significant growth in the euro, since the European Central Bank has been clear about maintaining the course of their current monetary policy and no hikes are expected for another year. Additionally, economic data released earlier this week from the eurozone was either lukewarm or did not meet the targets. Today we expect an ECB report for July, which is of medium importance, and that is the only significant publication for the euro.
The situation for the British pound, on the other hand, is becoming more dire. Despite positive statistics over the past few weeks and a recent interest rate increase by the Bank of England, right now the pound is losing positions against the euro. This is motivated by fears of a hard Brexit, with no deal secures between the United Kingdom and the European Union. Theresa May’s government has been very unstable in their message regarding their goals for Brexit, leaving economists guessing as to what might happen. No significant progress has been made towards securing a trade deal and the March deadline is approaching. The RICS price balance from the UK released earlier today met the forecasts, and we expect a couple of more reports later on in the day, including the trade balances for June.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8998, with the pair currently trading above it. We expect the EUR/GBP to continue rising in value, so look towards the nearby resistance levels at 0.9034 and 0.9053. The indicators of technical analysis unanimously agree on a strong buy signal.
