- Euro Weakness- Safe Haven Demand
- U.S- Europe Trade Tensions
- U.K Economic Uncertainty
EUR/GBP is struggling to climb higher at 1-week lows, amid Euro weakness. While the Euro has weakened amidst strong demand for safe havens, the Sterling Pound is struggling to capitalize, leaving the pair trading in a range.
While the pair appears to have found support above the 0.900 level, it is struggling to hold its ground amidst Euro weakness and sterling uncertainty. The pair lacks the drive as traders maintain a cautious approach amidst developments in the Eurozone and the U.K.
Time : 06-26-2020
Pivot : 0.9031
Technical View : Short Below 0.9011
Target : 0.8991 next 2 targets are 0.8964 and 0.8933
Comments : Weak Bearish
Last Price : 0.9057
Sentiments around the Euro continue to soften with the pair weakening as markets become cautious about a second wave of coronavirus infections. In contrast, the Euro’s safe-haven opponents are rising, piling more pressure on the single currency. However, expectations that the worst is unlikely, with the second wave continues to curtail Euro’s losses against the Pound.
Euro strength against the Pound is also being weighed down by growing tension with the U.S over trade. The U.S threatening to impose trade tariffs on $3.1 billion worth of EU goods has seen traders shrug off the Euro in favor of other safe-havens.
The EUR/GBP has struggled to capitalize on the Euro weakness on the fact that the British Pound is also facing its fair share of challenges. Even as the U.K is reopening, the second wave’s risk continues to affect the trader’s sentiments on the Pound. Similarly, Brexit uncertainty also continues to cast doubt on Britain’s economy.
British retailers are already casting doubt about the U.K economy ahead of the much-awaited lockdown easing. A CBI survey indicates that as many as 62% of retail outlets fear weak consumer demand due to the impact of the COVID-19 pandemic.
According to Bank of America analysts, the British Pound is behaving like an emerging currency in the aftermath of the COVID-19 pandemic and the ravaging BREXIT uncertainty. BofA analysts, Kamal Sharma and Myria Kyriacou have warned that the sentiments on the Pound could change significantly on the U.K departing the EU.
Looking ahead, a scheduled press conference of the European Central Bank President Christine Lagarde should influence how EUR/GBP ends the week, given its potential impact on the Euro.