The divorcing couple currency pair, the EURGBP, is oscillating between .90 and .87 and has been since the middle of September of 2017. It is falling in the short term and today’s signals hold a sell indication. The question is where it is going in the longer term. We think that it will continue its weakness. Remember, following the vote in June 2016 to leave the EU the GBP has weakened by over 20%. Using the Fibonacci retracement indicator, we can see that the oscillating price mentioned above and so if EURGBP breaks above the .90 level it will move on to higher levels, meaning the GBP is weakening against its EUR cohort. Fundamental signs of this weakness will be deterioration in the Brexit talks as well as weakness in economic performance within the British economy, as seen by today’s decline in the December Construction PMI report.
Brexit and the EURGBP
Daily Analysis - 03/01/2018