The situation on the daily chart of the EUR/GBP pair starts to look interesting. The last two days have led to a strong rebound from the support level of around 0.8920. Since the beginning of May we have had a very strong upward trend, and recently corrections have started at clear resistance zones. The same applies to the current situation, when the breaking of the mentioned zone led to a small correction and now to a strong rebound, determining the next higher low. It seems that the price is heading for the new maximum upward trend.
Looking for another resistance at which demand could stop, we have a level of around 0.9050, i.e. a series of highs from the end of last year and the beginning of this year. As far as the fundamentals are concerned, judging by the reaction to the euro’s quotations, this currency has favourably accepted political agreements concerning the staffing of EU seats, including the European Central Bank. On the british pound side, on the other hand, we still have uncertainty about the brexit and the choice of the successor to Prime Minister May. Yesterday, there was another issue – the President of the Bank of England surprised the markets by advocating a possible cut in interest rates if necessary. In his view, economic growth in the second quarter of this year may be lower than expected, and that may force the bank to react.
