Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. At the end of February we observed a brief upward correction in the exchange rate of this pair, but then the downward trend resumed and the rate is still within a bearish wave.
There is little in the financial markets that can affect the British pound at the moment. Earlier this week the United Kingdom published its first report on the budget for 2021 but this event did not affect the pound in the slightest. Indeed, while the pound might have some moments of doubt against the dollar in the GBP/USD pair, it seems much more confident versus the euro. As stated in our previous analyses of this pair, the sterling is supported by the prospect of the United Kingdom recovering from the pandemic faster than the European Union, largely thanks to a more successful and speedier vaccination campaign.
Fundamentals are not changing much for either currency, because the same trends are observed in both the EU and the UK: manufacturing PMIs are doing better than the forecasts, while the services numbers are not great, dragging the composite PMIs down.
As a result, the euro and the pound are in the same boat in terms of economic reports, at least for the moment. However, the slow vaccine approval process in the European Union, paired with the delayed deliveries of the already-purchased doses and the conflict between the European Commission and AstraZeneca almost certainly mean that the bloc will struggle to complete its vaccination goals in 2021. Thus, the euro is not gaining as much from risk appetite as the pound is.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8644, with the pair currently trading below it. The daily support levels lie at 0.8619 and 0.8595. The daily resistances are at 0.8668 and 0.8693. The indicators of technical analysis agree in strongly recommending a sell position today.
