Home Forex News EUR/GBP Grinds Lower as U.S Tariffs On EU Goods Loom

EUR/GBP Grinds Lower as U.S Tariffs On EU Goods Loom

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  • U.S – EU Trade Tariffs
  • Brexit Uncertainty
  • ECB Monetary Policy Meeting

EUR/GBP edged lower, Thursday morning, as the British Pound strengthened across the board, and the Euro came under immense selling pressure. The risk of the U.S imposing trade tariffs on $3.4 billion worth of Eurozone goods continues to fuel weakness on the Euro. The British Pound also continues to face its fair share of challenges, key among them being the BREXIT uncertainty.

Euro Weakness

Amidst the sell-off, the pair continues to trade in a tight trading range at three-month highs as Euro remains bullish despite recent weakness.

Time                            : 06-25-2020

Pivot                           : £0.9049

Technical View           : Long Above £0.9069

Target                         : 0.9089 next 2 targets are 0.9112 and, 0.9146

Comments                  : Weak Bearish to Neutral

Last Price                    : 0.9021

Technical View           : Short below 0.9029

Target                         : 0.9009 next 2 targets are 0.8986, and 0.8962

Euro weakness, however, threatens to fuel a sell-off in the EUR/GBP pair. The Euro is under immense pressure in the currency market in the wake of President Donald Trump administration threatening to impose new trade tariffs on European goods.

The U.S hitting the EU with tariffs at a time when local economies are struggling in the aftermath of COVID-19 disruptions continues to rattle Euro trader’s conversely fuelling weakness. Likewise, growing trans-Atlantic tensions should continue to weigh on EUR sentiments against the British Pound.

Defensive Pound

Similarly, the Sterling Pound is also on the defensive against the Euro as BREXIT uncertainty continues to send shockwaves. EU Chief Negotiator reiterating that Britain needs to give clear signals it is working towards a deal rattled the markets sending the Pound lower.

With Britain and EU likely to miss out on the agreed June deadline, the Sterling looks set to remain defensive, something that should continue to weigh on EUR/GBP price action.

The Pound has also come under pressure on top medics, warning the risk of opening the economy too soon. With the U.S already struggling with a second wave of infection following the early opening, Medics have warned that the U.K could also fall into the same trap.

It promises to be a busy day for the EUR/GBP pair with the European Central Bank Policy Meeting Accounts release.

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