Today we would focus on Europe as we take a look at the EUR/GBP currency pair. With the recent weakness in the euro, the value of the EUR/GBP has been climbing steadily.
There are currently no incentives for the euro to strengthen. The single currency will remain weak amid the ECB’s dovish monetary policy and reluctance to increase interest rates. Whether the euro will weaken any further or stabilize against other currencies depends on upcoming inflation data, but overall we expect the EUR to give way to other currencies in terms of trend and momentum.
On the other hand, the British pound is currently experiencing positive developments. The Bank of England is showing signs of hawkishness. They are looking to decrease quantitative easing a bit. Recent economic data from the United Kingdom has also been positive, so we expect the pound to be bullish. Today there will be a speech by the Bank of England’s governor Mark Carney which is of high importance as it may show clues of an upcoming interest rate increase in the UK.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8817, 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 0.8863 and 0.8882. The indicators of technical analysis unanimously agree on a strong buy signal.
