- U.K Economy Reopening
- U.K Factories Layoffs
- BREXIT Uncertainty
EUR/GBP was struggling for direction, Friday morning, after a recent sell-off from three-month highs. The sell-off comes at the backdrop of the British Pound strengthening across the board amidst the reopening of the economy in the aftermath of the COVID-19 pandemic. A resurgent British Pound has also helped push the GBP/USD pair to one-week highs.
EUR/GBP retreated from three-month highs as the Euro struggled to hold on to gains, weakening across the board. On the other hand, the Pound has continued to strengthen across the board amid growing concerns about the U.K economy.
Time : 07-03-2020
Pivot : 0.9018
Technical View : Short Below 0.8998
Targets : 0.8991 – 0.8978 – 0.8971
Comments : Weak Bearish
Last Price : 0.9019
The British economy is facing its biggest contraction in recent years, a development that has sparked calls for negative interest rates. COVID-19 disruptions have taken a toll on economic activities given the lockdown measures imposed.
The unemployment rate is at risk of edging higher as British factories are increasingly looking fragile and likely to lay off workers given the lack of business and orders with the shutdown of borders. Immediate data indicates that 46% of manufacturers are contemplating redundancies over the next six months up from 25% in May.
Amidst the economic turmoil, the British Pound has bounced back and continues to strengthen against the Euro and the U.S Dollar.
GBP/USD Bounce Back
The GBP/USD pair has already bounced back from one-month lows and continues to edge higher. However, the GBP/USD pair faces strong resistance at the 1.25 level.
Time : 07-03-2020
Pivot : 1.2483
Technical View : Long above 1.2503
Targets : 1.2523 – 1.2563 – 1.2591
Comments : Weak Bullish
Last Price : 1.2490
The bullish momentum around the British Pound could be attributed to, among other things, the reopening of the economy. Pubs and restaurants are back in business with the easing of lockdown restrictions designed to curb the spread of the virus.
The Pound could, however, come under pressure as the BREXIT uncertainty continues to arouse concerns. EU’s Chief Negotiator has already hinted that negotiations are not going well, complaining of a lack of respect and lack of engagement from the British government.