Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The price went through a sharp decline a week ago and has remained volatile all week due to the Brexit developments.
The British pound is currently under a heavy pressure from Brexit, as investors’ confidence that the issue will be resolved in a positive way is wearing thin. Last night Theresa May, in a last attempt to defend her deal in Parliament, said she would resign as Prime Minister if the deal is approved in the upcoming third meaningful vote. Members of Parliament also held their first series of indicative votes on Brexit alternatives, which failed to outline a path forward, since none of the options gathered a clear majority. May is supposed to put her deal to a vote this week, with more indicative votes to be held next week. The United Kingdom only has 2 weeks to inform the EU if they intend to participate in the European Parliamentary elections or not, which would determine how much time they would get for further negotiations.
The euro does not have much to do in the present situation, besides react to outside factors. The ECB’s stance remains unchanged, and while fundamentals have not been that bad recently, today we still await a new portion of key indicators, such as the consumer price index and unemployment rate from Germany, the EU’s strongest economy.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8534, with the pair currently trading above it. The daily support levels lie at 0.8507 and 0.8458. The daily resistances are at 0.8583 and 0.8610. The indicators of technical analysis are giving us a strong sell recommendation.
