EURGBP
The EURGBP dipped yesterday but the pound is not out of the woods with Brexit at a “critical stage”. The European Central Bank also meets next week to announce their latest decision on interest rates.
Britain’s Business Secretary Alok Sharma said yesterday on Brexit talks:
“We are at a critical phase. It is fair to say that we are in a difficult phase, there are some tricky issues still to be resolved.”
Talks are still at an important stage and this week saw France threaten to veto the talks if the deal doesn’t satisfy their terms. This is the real threat for EURGBP in the next two weeks where a deal could be agreed but it could be blocked by U.K. and EU politicians or one of the EU27 countries.
Next week sees the latest ECB meeting to announce their interest rate and monetary policy. According to a survey of economists by Bloomberg, the ECB is expected to extend two key stimulus programs into 2021 in order to support the economy until vaccines are available. Additional bond-buying in the 250bn to 650bn range and further access to cheap loans for banks is expected to cushion the damage from the recent lockdowns.
The EURGBP has risen from the 0.8870 support level and has rallied towards the 0.9100 level. The price is currently above the 50-day moving average and could see further strength if it can hold above this level. The resistance level above is at 0.9200-9300. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
