The EURGBP has moved back into a recent range after the panic move higher lost some steam. Despite this, the pair still trades 150 pips above the .9000 level.
Yesterday saw talk of the Bank of England employing negative interest rates hit headlines. The bank’s Governor insisted a month ago that the U.K. was in no rush to copy some of Europe and Japan with negative rates but a month is a long time in economics and the recent souring of Brexit talks has brought the idea back into play. Negative lending rates may be employed as a policy option if a No Deal Brexit occurs.
The latest drama involves the U.S. and the U.K. Foreign Secretary Dominic Raab flew to the United States for talks with leading politicians after a week of hostility from leading Democrats, including Joe Biden and Nancy Pelosi. The threat to alter the Withdrawal Agreement with the European Union has rattled U.S. politicians who threatened that the actions could threaten a trade deal with the U.S. if Biden was to win.
Next week’s economic calendar is light on high impact releases with only German consumer confidence related to the EURGBP. The Brexit situation will dominate once more, whilst talk of further national lockdowns in the United Kingdom could sour traders’ outlook for the U.K. growth picture.
The EURGBP was trading back within the recent 0.9150 resistance level and this zone will define the next path for the pair. EURGBP is struggling to get back above the resistance today and we may see the 50-day moving average come into play before further gains. The Investing Cube team is available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
