The impact of recent political uncertainty has put the EUR to GBP pair under much pressure. For EUR, the uncertainty has arisen from Russia’s dependency on oil and gas, which invaded Ukraine last month.
EUR to GBP fundamentals
The current Russian invasion of Ukraine is poised to impact both the United Kingdom and the European Union. This is because the two entities are heavily reliant on Russian oil. Although the prices have remained stable even after the invasion, the oil shortage will impact the pair. Today, both the UK and the EU have not placed sanctions on the oil and gas from Russia, but when they do, I expect a weakening of the pair.
EUR to GBP Price Prediction
Looking at the daily chart of the EUR to GBP, the prices have been trading within a descending channel since April 2021. The chart also shows that the prices recently hit and broke a long-term support level of 0.82. The EUR/GBP prices are also trading at a lower price, held since June 2016.
The EUR/GBP price chart also shows that the price recently touched and broke the lower trendline of descending channel. Although a look in the past price action of the pair has seen it break the lower trendline multiple times and then return to the channel, the current breakout looks poised to continue. This is due to the fact that the current bearish move is aggressive and has already broken a long-term support level.
Therefore, I expect the prices of EURGBP to trade at 0.81 in the coming days. In the daily chart below, my prediction is the pair will be trading within the yellow region in the next few days. However, if the prices reverse back inside the descending channel, it could invalidate my analysis. It will also mean that it will be much slower, although the bearish move will continue.