- ECB expectations help the shared currency stay strong against its rivals.
- Brexit headlines allow the GBP show resilience.
The EUR/GBP pair finally broke out of its 3-week old range on Thursday and refreshed its highest level since early May at 0.8837 as the euro remained as the focus of the markets’ ahead of next week’s ECB meeting. However, the pair struggled to preserve its gains after the latest developments surrounding Brexit negotiations allowed the GBP to find some demand.
“We should expect a plan at the next Governing Council meeting on 14-June for the APP beyond its current completion date in September, ” Greg Gibbs, Founder, Analyst, & PM at Amplifying Global FX Capital Pty Ltd wrote in a recent report.
On the other hand, the UK has announced the new backstop proposal today and the EU’s Brexit negotiator Michel Barnier said that they welcomed the new publication and added that the backstop had to respect the EU’s single market and customs union. Responding to the new proposal, the Irish said that there still was a lot of work to do.
Meanwhile, the data from the euro area showed that the real-GDP in Q1 grew by 0.4% and 2.5% on a quarterly and a yearly basis respectively to match the general consensus.
Technical outlook
0.8835 (May 10 high/daily high) now aligns as the immediate resistance ahead of 0.8900 (psychological level) and 0.8965 (Mar 7 high). On the downside, supports could be seen at 0.8800 (psychological level), 0.8700 (psychological level/May 29 low) and 0.8625 (Apr. 16 low).
Share
