Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. A new bullish wave started last week that is still continuing, although the climb is rather slow and modest. Still, the pair is currently trading at its highest level in over a week.
The situation of the British pound sterling is still rather favorable. This week’s inflation data was in line with the forecasts, and even slightly better in the case of the YoY reading. Considering the success of the Covid-19 vaccination campaign in the United Kingdom and the near-complete loosening of the social and economic restrictions, the economy of the UK is set to return to normalcy pretty fast. In other words, there aren’t really any factors to pressure the pound. The GBP is also a currency that responds well to risk appetite, so it will remain consistently strong as long as investors are optimistic about the end of the pandemic.
Still, it is important to note that the euro is benefiting from the same market conditions as the pound. Inoculations in the European Union have sped up, with the bloc having administered at least one dose of any of the approved vaccines to over 30% of its population (though some member states have been more successful than others). Fundamentals have also been consistent with the forecasts, allowing the euro to hold onto its positions.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8625, with the pair currently trading above it. The daily support levels lie at 0.8606 and 0.8590. The daily resistances are at 0.8641 and 0.8660. The indicators of technical analysis are mixed but lean towards recommending a sell position today.
