The EUR to GBP managed to break above the 0.84 mark amid general GBP weakness. Hard rhetoric ahead of the Brexit negotiations between the UK and EU which are scheduled to start on Monday has been pushing the pound lower. Brexit talks are expected to last by the end of the year and the uncertainty might weigh on the British pound.
Germany’s DIW Institut forecasts that the German economy will grow by around 0.1% in the first quarter of the year. The Insitute also noted that the coronavirus effect is still unclear and can’t be quantified yet. The recession in Germany’s industrial sector will continue regardless of the coronavirus outbreak and warned that the export-oriented German economy would be particularly affected if the virus continues to spread for a long time around the globe.
EURGBP is 0.63% higher at 0.8419 as the rebound from two-month lows is intact. The technical outlook is bearish for EURGBP despite today’s jump above the 0.84 mark.
On the upside, the first hurdle will be met at 0.8425 the daily top. A break above might test the next supply zone at 0.8463 the 50-day moving average. The next resistance level is at 0.8523 the 100-day moving average.
On the flip side, initial support for the pair stands at 0.8356 the daily low. Next level of support is the February 25th low at 0.8337. In case the selling pressure persists the next target is the 2020 lows at 0.8280.