EURGBP Under Selling Pressure as Conservatives Secure Parliament Majority
EURGBP is giving up 1.12% at 0.8351 on general GBP strength across the board. The Conservatives cleared a parliamentary majority in UK elections that opens the way for the Brexit on January 31st. The doubts now on Brexit deal move to the uncertainty around the relationship between UK and EU after the Brexit.
The ECB in its policy meeting yesterday under Christine Lagarde kept interest rates unchanged as was widely expected by markets. ECB revised lower its forecasts for 2019, now it sees GDP growth at 1.2% below the 1.1% seen in September. For 2020 ECB sees GDP growth at 1.1% the previous forecast was 1.2% in September.
EURGBP is under selling pressure since August 2019 as the economic data pressures euro while on the other hand pound gained momentum after the announcement of the December elections. Investors hope that a stable government will be able to process a Brexit plan.
On the technical analysis side as the negative momentum persists, immediate support stands at 0.8275 the daily low while in case of a break below that support, a move down to three-year lows at 0.8297 from April 17th, 2017. Next active demand zone for the pair stands at 0.8178 the low from June 27th, 2016. Traders holding short positions can enjoy the ride as long as the pair trades below 0.84 mark.
On the other side, immediate resistance for EURGBP stands at 0.8445 today’s top. If the pair closes above that level then needs to clear the high from November 27th at 0.8583. What can cancel the bearish momentum is a move up to 50-daily moving average at 0.8676.