We should try to sell the pair today,
Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. The euro gained quite a bit against the pound in late September when a round of Brexit negotiations failed to produce a deal, but the euro has been having its own struggles lately which once again drag the pair down.
To begin with, the European single currency is still bound on an almost fixed course. The ECB is maintaining their dovish monetary policy and we don’t expect any changes there until at least the middle of next year. However, fundamental data for the eurozone is alright and investors are hopeful that the EU will do better in Q3. Nevertheless, the single currency is still exposed to risk, recently taking a hit on fears that Italy will not meet the EU’s budgetary goals, though this issue has since been resolved.
The British pound is naturally mostly affected by the way Brexit negotiations are proceeding. At the most recent summit of European leaders, British PM Theresa May’s plans failed miserably and officials warned that a no-deal Brexit seems very likely. This has greatly destabilized the pound which currently lacks any incentives to strengthen.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8882, with the pair currently trading below it. We expect the EUR/GBP to continue dropping in value, so look towards the nearby support levels at 0.8846 and 0.8824. The daily resistances are at 0.8904 and 0.8940. The indicators of technical analysis recommend a strong sell position.
