EUR/GBP pushed higher impulsively amid strong bullish pressure recently inside correction at the edge of 0.87 price area for a few days in a row. The recent Brexit developments, including unexpected resignation of the key Brexit officials, dealt a blow to GBP. At the same time, EUR gained momentum.
Ahead of ECB President Draghi's speech today, EUR has chances to extend its momentum in the coming days. Though EUR found support from recently published economic reports, there are still certain shortcomings for the eurozone's economy because of the bank stress test which needs fixing. Today the eurozone's final CPI report is going to be published which is expected to increase to 2.2% from the previous value of 2.1%, Final Core CPI is expected to be unchanged at 1.1%, Italian Trade Balance is expected to increase to 2.87B from the previous figure of 2.56B, and German Buba President Weidmann is going to speak about the eurozone's key interest rate and future monetary policies.
On the other hand, GBP is vulnerable to Brexit issues. GBP is expected to extend its losses further in short term. Judging by the current economic situation in the UK, the Bnak of England is unlikely to raise interest rates in 2019 as recently UK Brexit minister Dominic Raab stepped down. Moreover, GBP is also weighed down by escalating tensions in the UK government.
Meanwhile, EUR has been quite positive and optimistic with the economic reports while GBP has been hurt by the Brexit deadlock. Taking advantage of GBP weakness, EUR is expected to extend its gains in the process.
Now let us look at the technical view. The price is currently residing above 0.8850 area with a daily close, which is expected to lead to further bullish pressure in the coming days. The price has recently formed Bullish Divergence as well which is also expected to support the upcoming bullish pressures. As the price remains above 0.8700 area, the bullish bias is expected to continue with target towards 0.8950-0.90950 resistance area.
SUPPORT: 0.8700, 0.8850
RESISTANCE: 0.8950, 0.9050
BIAS: BEARISH
MOMENTUM: VOLATILE
