EUR/GBP has recently broken below the resistance area of 0.8850-0.8950 with an impulsive bearish pressure. GBP has been quite dominant over EUR which still has greater chances of moving lower towards the support area of 0.8420-0.8550. Despite having mixed economic reports today EUR has gained momentum which is expected to retest the resistance area before it shows some bearish pressure in the future. Today, German GfK Consumer Climate report was published with a decreased figure to 10.8 from the previous figure of 10.9 which was expected to increase to 11.0 and Spanish Flash CPI report was published as expected at 1.8% which previously was at 1.6%. On the GBP side, today BOE Governor Carney is currently speaking about how the Bank of England independence will help to handle the Brexit pressure that has already pushed GBP up. Besides, Prime Minister May is having a speech about the Free Market economy for the Bank of England and she believes that it will help in the future growth of the economy. If the proposals are accepted by the BOE, GBP is expected to move lower impulsively in the future. To sum up, GBP is still quite strong fundamentally. In light of today’s economic events, GBP is expected to gain much more strength against EUR in the coming days.
Now let us look at the technical chart. The price is currently residing below the resistance area of 0.8850-0.8950 where the price is expected to retest again before proceeding down towards the 0.8550 support level in the coming days. If the price remains below the resistance area and dynamic level of 20 EMA with a daily close, the bearish bias is expected to continue.