EUR/GBP has been quite impulsive with the bullish gains recently which lead the price to reside at the edge of resistance area between 0.9030 to 0.9100. GBP has been hurt by BREXIT jitters whereas EUR did also been affected by BREXIT. However, the real trouble mounts on GBP at the current situation.
Europe is currently dealing with the indecision of UK Prime Minister Theresa May and the EU authorities are currently losing patience. Though European high officials declared that the deal cannot be changed but the struggle is still hurting the economy at present. EUR has been affected by Italy's budget deficit issue for a few weeks in a row which still did not come to a better solution. As a result, the EUR bulls are losing faith in further growth of EUR. Recently, ECB President Draghi has been quite positive in his remarks on the eurozone's outlook. Besides, better-than-expected economic reports encouraged overall gains of EUR. Today Italian Quarterly Unemployment Rate report was published with a positive result of a decrease to 10.2% from the previous value of 10.7% which was expected to be at 10.3% and Industrial Production increased to 0.2% as expected from the previous value of 0.6%. Ahead of Main Refinancing Rate decision and ECB Press Conference tomorrow, EUR is expected to trade with higher volatility, with prospects of gaining momentum.
On the GBP side, the mixed economic reports managed to provide GBP with support that could lead to certain bearish pressure in the short term. Current steps taken by UK Prime Minister Theresa May aim to delay a BREXIT vote in the parliament that might also result in cancelling the deal at all. Average Earning Index performed better than expected but the Unemployment Rate and Claimant Count change being quite neutral represent worsening economic conditions in the UK.
Meanwhile, GBP is currently struggling to gain momentum over EUR which might lead to further bullish pressure in the pair for the future. Though certain positive UK economic reports may cause certain pullbacks along the way. EUR is likely ot hold the upper hand over GBP.
Now let us look at the technical view. The price is currently pushing lower quite impulsively, leading the price below 0.9030. Recently the price formed Bearish Divergence along the way while pushing higher impulsively towards 0.9030-0.9100 area which is expected to result in certain bearish pressure leading the price to push lower but it is expected to be short-lived. As the price remains above 0.8850 area with a daily close, the bullish bias is expected to continue.
SUPPORT: 0.8850, 0.8950
RESISTANCE: 0.9030, 0.9100
BIAS: BULLISH
MOMENTUM: VOLATILE
