Global macro overview for 06/10/2016:
Germany's Chancellor Angela Merkel spoke to BDI lobby group in Berlin today and her remarks regarding economy and Brexit were quite interesting. Merkel said the German economy is in good shape and the German industry should be applauded for being open in turbulent times. Despite the Brexit headwinds and other big challenges that lay ahead, she still sees some room for a modest tax relief. Regarding Brexit, she said the UK must first trigger Article 50 and then talks will tackle how much single-market access can be given to the UK afterward. Ignoring those rules would damage the eurozone. In conclusion, quite aggressive statements from the German Chancellor were addressed of course to British Prime Minister May, who recently acknowledged the beginning of the full Brexit process as soon as March 2017. The question remains whether all necessary talks and negotiations will be ready before this date.
Let's now take a look at the EUR/GBP technical picture in the daily time frame. Another higher high has been made in this pair, but the growing bearish divergence might start to influence the price action soon. The overall trend is still bullish, but it is only a matter of time when the next downward correction will occur. The next support is seen at the level of 0.8723.
