EUR/GBP has been quite impulsive with the bullish gains after bouncing off the 0.8700 area with a daily close recently. Despite mixed economic reports, EUR has managed to gain momentum, taking advantage of GBP weakness due to recent BREXIT developments and worse economic reports.
The European Commission recently took certain measures to discipline Italy over its expansionary 2019 draft budget after Rome refused to change it. The increase in Italy's debt which is at 131 percent of GDP which is now confirmed to be the second highest debt figure after Greece. Despite the worse budget figures, Italy is still quite optimistic as they think it will help in growth in the future. Today, ECB Monetary Policy Meeting Accounts report is going to be published which is expected to have a positive impact on the EUR gains in light of recent hawkish statements from the ECB President. Moreover, today a Consumer Confidence report is going to be published which is expected to be unchanged at -3. Flash Services and Manufacturing reports to be published tomorrow are is expected to be quite mixed. The pair is set to trade with higher volatility this week.
On the GBP side, recently Public-Sector Net Borrowing report was published with a negative figure of an increase to 8.0B from the previous figure of 2.0B which was expected to be at 5.6B. The worse result affected GBP gains which may lead to further weakness in the future. Today MPC Member Saunders is going to speak about the interest rate and monetary policies. His rhetoric is expected to be neutral with no significant impact on the upcoming GBP momentum.
In the meantime, EUR is expected to increase its gains over GBP in the coming days while GBP is struggling to maintain sustainable momentum due to economic and political issues along with a BREXIT impact which has already started to affect the trades and commerce of the UK.
Now let us look at the technical view. The price has been quite corrective and volatile after pushing above 0.8850 area with a daily close. The price is currently expected to push higher towards 0.8950 and later towards 0.9050 resistance area as the bullish pressure remains constant. The price having no Bearish intervention sign of Divergence or Counter momentum is expected to proceed higher but certain corrections can be observed along the way. As the price remains above 0.8850 area, the bullish bias is expected to continue.
SUPPORT: 0.8700, 0.8850
RESISTANCE: 0.8950, 0.9050
BIAS: BULLISH
MOMENTUM: IMPULSIVE
