Today our focus will remain on Europe as we take a look at the EUR/GBP currency pair. After a steady downward correction at the end of March, so far in April the trend has been more or less flat, with just the smallest of fluctuations.
The British pound is currently under a lot of pressure. The coronavirus is spreading throughout the United Kingdom at an accelerated rate, surpassing 60,000 today. The UK government was a bit late in imposing measures such as social distancing, and even then there were reports of people not following the guidelines. Moreover, the fact that Prime Minister Boris Johnson is in the hospital being treated for coronavirus complications is affecting the pound negatively, as it means the government is currently missing its most important component. Dominic Raab has stepped in for Johnson in the meantime, but the pound remains under pressure.
Meanwhile, today the countries of the European Union are resuming their meeting to decide what measures to take to support the economy and shield it from the worst of the negative impact of the Covid-19 pandemic. There is a deep rift between member states, as the most heavily affected countries want jointly guaranteed debt, commonly referred to as “coronabonds,” while richer (and also less affected) countries like Germany, the Netherlands, and Finland object to this measure, fearing it would plunge the EU in another financial crisis further down the line. If the two camps fail to reach a compromise, the euro will weaken due to the lack of proper financial support.
In terms of the daily chart, today we have a pivot point for the pair located at 0.8783, with the pair currently trading below it. The daily support levels lie at 0.8727 and 0.8688. The daily resistances are at 0.8821 and 0.8878. The indicators of technical analysis are a little mixed today but ultimately give us a strong sell signal.
