- Brexit talks Uncertainties
- Solid U.K PMI
- U.K Negative Interest Push
EUR/GBP pair edged higher as the GBP/USD slumped on the British Pound coming under pressure Tuesday morning. Weakness in the Sterling stems from growing concerns about BREXIT talks that are going on in London, after breaking down abruptly last week.
Pound under Pressure
The GBP/USD has struggled to edge higher after a recent bounce back from one-month lows. The 1.2525 level has emerged as a critical resistance level curtailing any upside action on the GBP/USD pair.
Time : 07-07-2020
Pivot : 1.2498
Technical View : Long above 1.2518
Target : 1.2538 – 1.2549 – 1.2579
Comments : Weak Bearish to Neutral
Last Price : 1.2466
Technical View : Short below 1.2478
Target : 1.2461 – 1.2447 – 1.2425
The Pound is on the defensive against other major currencies amidst uncertainties around the U.K. Economic recovery following the COVID-19 disruption is one of the developments that has continued to rattle traders’ sentiments on the Pound.
However, better than expected, data continues to limit weakness on the Sterling. For starters, immediate data indicates that the U.K manufacturing sector improved significantly in June with the Purchasing Managing Index printing a high of 55.3 from 28.9 in May.
Recoveries in the manufacturing sector provide hope to other sectors, conversely offering support to the Pound against the U.S dollar. However, the GBP/USD pair remains susceptible to further declines, given the uncertainty around ongoing BREXIT talks.
The EUR/GBP pair, on the other hand, is showing signs of accelerated upward movement from one-month lows. The bounce-back stems from weakness around the Sterling as the Euro continues to strengthen across the board.
Time : 07-07-2020
Pivot : 0.9046
Technical View : Long Above 0.9066
Target : 0.9079 – 0.9089 – 0.9107
Comments : Weak Bullish to Neutral
Last Price : 0.9035
Technical View : Short below 0.9026
Target : 0.9011 – 0.9003 – 0.8993
The Euro has so far remained resilient against the Pound as traders remain optimistic about the Eurozone handling of the COVID-19 pandemic. The passing of a massive €1.35 trillion stimulus plan has continued to strengthen sentiments around the single currency.
The British Pound, on the other hand, remains under pressure against the Euro amidst talk of negative interest rates, highly needed to revitalize the struggling U.K economy. Likewise, the Pound faces a lot of uncertainties around the Brexit talks as well as the economic recovery in the aftermath of COVID-19.