Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. Over the past week the pair has traded somewhat choppily, but it has managed to adhere to the more pronounced bullish trend that started on August 11.
At present, there are no significant factors to either weaken or strengthen the British pound sterling. The United Kingdom is still experiencing one of the most serious outbreaks of the delta variant of the coronavirus, with thousands of new cases emerging every day. However, considering the success of the vaccination campaign, most cases are mild. So far the government has not seen the need to impose new restrictions or lockdowns, which is good for the UK economy, but the ongoing outbreak is also not allowing investors to relax about it completely. Due to the lack of important fundamental events regarding the pound, the fate of this pair will be up to the euro for the time being.
As for the European single currency, it has managed to hold strong against the pound for a few weeks now. Thanks to positive economic reports from the eurozone and a relatively low degree of concern regarding the coronavirus, the euro has served as one of the more reliable risk-friendly currencies on the market. Nevertheless, it is possible that the EUR will run out of steam soon, especially considering next week’s monetary policy meeting of the European Central Bank. Due to the improving fundamentals, some investors are expecting a more hawkish tone from the ECB this month, which can strengthen the euro further.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8591, with the pair currently trading slightly above it. The daily support levels lie at 0.8577 and 0.8559. The daily resistances are at 0.8609 and 0.8623. The indicators of technical analysis agree in strongly recommending a buy position today.
