The EUR to GBP exchange rate consolidation continues unabated. While above the 0.90 level, the price action remains bullish, but the declining channel suggests the pressure for a break lower mounts.
The cross reacted recently to every news out of the United Kingdom or the European Union regarding the Brexit vote. So far, the two negotiation parties continue discussions, proving that the market swings over the summer and at the start of the autumn were nothing but movements insight tight ranges.
Now that the end of the year nears, the focus shifts to what really matters for the currency market – interest rates and monetary policy. The ECB this Thursday may be a game-changer for the Euro pairs, EURGBP included.
ECB On Thursday Decisive for the EURGBP Cross Pair
The ECB’s interest rate decision this week should trigger some volatility on the Euro pairs. While the consensus is for the central bank to postpone any major new announcement to December, the pressure mounts to act earlier.
The coronavirus pandemic advances quickly, and the number of daily infections grows exponentially. As such, the second wave of infections triggered local lockdowns that will eventually affect economic performance.
One of the things that the market fully agrees is that the ECB must do more to fight the economic slowdown. Having said that, the only thing that remains to be decided upon is the timing. October or December? Judging by how the pandemic advances, the sooner the ECB acts, the better.
EUR to GBP Technical Analysis
What seemed to be a bullish flag on the EUR to GBP exchange rate turns out to be a descending channel. One that puts pressure on the 0.90 level the closer we get to the ECB’s decision. Therefore, bears may want to sell a clear break of the 0.90 level with a stop-loss at the 0.9130 and a take profit below 0.88.
EUR to GBP Price Forecast
