Listen to the latest market mood for the EURGBP pair.
Weak EUR, Strong GBP
The EUR is facing pressure as the hotly debated Euro recovery fund will be spoken about by EU leaders today. The chances of getting the deal past the ‘frugal four’ (Denmark, Sweden, Netherlands and Austria) are slim. The EUR should remain pressured today and the USD strength on rising COVID-19 cases should keep the EURUSD pressured. There is a large option expiry at 1.1200 keeping the EURUSD contained for now before the NY cut.
The GBP should find strength strong at the moment on a couple of issues.
- Firstly, optimism that the EU and the UK could reach a trade deal. Boris Johnson has suggested an agreement could be reached in July. Even though this is unrealistic there is hope a renewed effort from the EU and UK can yield results.
- Secondly, the Bank of England held back from negative interest rates, kept rates unchanged, and was optimistic about the pace of the UK economy’s recovery in yesterday’s rate meeting.
Therefore, expect EURGBP sellers at the market and on pullbacks.
We expect this outlook to play out into the end of the US Session. Though the outlook remains valid as long as these conditions remain the same.
Main Trade Risks
- One risk is if there is negative Brexit news.
- Another risk is if there is positive Euro-Recovery Fund news.