- EUR/GBP crawls beyond 0.9000 and tests three-month highs above 0.9055.
- The pound suffers on the back of ballooning UK public debt and Brexit fears.
- Analysts at Credit Suisse suggest a potential bullish triangle formation above 0.9056.
The euro remains bid against the pound, which is depreciating across the board on the back of a surging government borrowing and the lingering fears about a no-deal Brexit. The euro has taken advantage of GBP weakness, to extend Tuesday’s rebound from 0.8912 to nearly three-month highs at 0.9072.
Government borrowing and Brexit hurt the pound
British government borrowed £55.2 billion in May, which is about nine times the amount borrowed 12 months before and shows the strong impact of the coronavirus shutdown in the UK economy. These figures put Britain’s public debt above the country’s output for the first time since 1963. Beyond that, the lingering concerns about the possibility of a no-deal Brexit, as a senior French minister suggested today, remains weighing on the GBP.
Alternatively, the euro has been buoyed by hopes about the outcome of the European leaders’ discussions about the €750 billion fund to support coronavirus hit countries, although the possibility of a breakthrough has been delayed, at least, until July.
EUR/GBP likely to build a bullish triangle pattern above 0.9056 – Credit Suisse
In a bigger picture, the FX Analysis team at Credit Suisse sees the pair biased higher, likely to shape a bullish triangle pattern on a break of 0.9056 resistance, "Resistance is seen at 0.8997 initially, then 0.9025/28, above which should clear the way for a move back to the recent high and ‘measured base objective’ at 0.9056/57. Above here is needed to confirm a bull ‘triangle’ and resumption of the uptrend from March with resistance then seen next at the 50% retracement of the March/April fall at 0.9086 and eventually at the 61.8% retracement at 0.9184.”
EUR/GBP key levels to watch
|Today last price||0.9053|
|Today Daily Change||0.0034|
|Today Daily Change %||0.38|
|Today daily open||0.9019|
|Previous Daily High||0.9042|
|Previous Daily Low||0.895|
|Previous Weekly High||0.9015|
|Previous Weekly Low||0.8864|
|Previous Monthly High||0.9054|
|Previous Monthly Low||0.8691|
|Daily Fibonacci 38.2%||0.9007|
|Daily Fibonacci 61.8%||0.8985|
|Daily Pivot Point S1||0.8966|
|Daily Pivot Point S2||0.8912|
|Daily Pivot Point S3||0.8874|
|Daily Pivot Point R1||0.9057|
|Daily Pivot Point R2||0.9095|
|Daily Pivot Point R3||0.9149|
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