EUR/GBP is currently trading at the edge of 0.8800-50 resistance area from where the price is expected to sink lower following the overall downtrend. The eurozone has been posting evidence of an economic slowdown. As a result, EUR is set to lose ground versus GBP in the coming days despite the BREXIT uncertainty.
The question is still open whether the UK will leave the EU with or without a divorce deal. Speculators are currently debating on the benefits and pitfalls of each decision. As the UK is facing political turmoil, the BREXIT situation is getting more mysterious. First Prime Minister Theresa May should get a BREXIT deal approved by the British parliament. Then she will decide whether to delay BREXIT or thrust the economy with NO DEAL. No Deal BREXIT is sure to pose a global threat where GBP will be the main victim. The European Union is not in the mood of delaying BREXIT which might lead to NO DEAL BREXIT. This worst-case scenario will certainly send shock waves across global financial markets.
The weak GDP report from the UK was the biggest nuisance for GBP buyers this week which is expected to be overcome in the coming days as the eurozone weakness averts the market sentiment away from EUR. Moreover, UK CPI and Manufacturing Production reports also revealed downbeat data.
Meanwhile, GBP has been the weaker currency in the pair. On the other hand, downbeat economic reports from the eurozone also bearish for EUR. If the UK presents better economic reports in the coming days, this may encourage GBP to gain momentum. As a result, the pair may carry on with its decline in the coming days.
Now let us look at the technical view. The price is currently trading at the edge of 0.8800-50 from where the recent bullish corrective weakness is expected to lead the price lower towards 0.8650 support area in the coming days. As the price remains below 0.90 area with a daily close, the bearish bias is expected to continue further.
SUPPORT: 0.8500, 0.8650
RESISTANCE: 0.8850, 0.8950, 0.90
BIAS: BEARISH
MOMENTUM: VOLATILE