- Euro’s performance hindered by the EU leaders’ failure to find favorable economic recovery agreement.
- The Pound Sterling takes advantage of the Euro’s situation.
- UK housing market data favors GBP.
The EUR/GBP has started this week on a bullish trend indicating that the Pound Sterling is gaining some ground against the Euro. This mostly has to do with the recent negotiations by EU leaders seeking to achieve a middle ground on an economic recovery plan despite holding talks for three days. This led to uncertainty, which tricked down to investor decisions, thus forcing traders to cautiously limit their investments in the Euro.
Time : 20/07/2020
Pivot : 0.9108
Technical View : LONG ABOVE 0.9128
Target : 0.9147, 09174
The EU leaders failed to strike a deal on Sunday after holding talks to discuss an economic recovery plan. The legislators failed to agree on a 1.8-trillion-euro ($2.06-trillion) economic stimulus package that is aimed at helping European economies to recover from the economic fallout caused by COVID-19. Unfortunately, failure to agree on the stimulus package meant uncertainty for Euro investors, and this is why the failure to come up with a deal affected the Euro’s performance.
Meanwhile, the Pound’s rally was also backed by positive data from the UK housing market. A property platform called Rightmove revealed that there was a 2.4% increase in the average property asking price in the UK in July so far compared to the asking price in March just before the coronavirus-induced lockdown was announced.
The rally in the property asking price in the UK is courtesy of the economic recovery process after the easing of the restrictions that had been put in place due to the COVID-19 outbreak. Such positive news is bound to increase investor confidence, and this is exactly what seems to have happened, thus giving the GBP a boost against the Euro.
As far as the performance outlook for the EUR/GBP is concerned, the Brexit issue is expected to gain steam towards the end of the year. British legislators expressed interest in finally pushing through with Brexit regardless of the type of deal that they will get.