EUR/GBP Jumped Almost 3% in May; Analysis by JFD Brokers

British Pound is under strong pressure, as almost two weeks before the U.K. general elections election, the government considers to halt Brexit talks, if they are forced to pay a big exit bill, as much as €100 billion. Moreover, while the market expects widely the winner of elections to be again Theresa May from the Conservative party, the latest polls revealed that she leads only 8 points over Jeremy Corbyn from the Labour party. The uncertainty in the country’s future weighs down on the British currency, which depreciates against all the majors. On the other hand, E.U.’s Brexit negotiator Michel Barnier said that E.U. is ready and well prepared for all the negotiations for U.K.’s way out of the union.


EUR/GBP Jumped Almost 3% in May
Euro had a sharp bullish movement versus the British pound since yesterday and penetrated the descending trend line, that was standing since October 2016, to the upside. The EUR/GBP pair surged almost 3% so far this month and early this morning recorded a new 2-month high at 0.8674. The next immediate resistance to watch is the 0.8730 strong resistance level. It is worth mentioning that the price surpassed above the three simple moving averages (50, 100 and 200) on the daily chart and is moving upwards aggressively.

From the technical point of view, on the same short-term chart, the technical indicators are rising approaching the overbought areas. The Relative Strength Index (RSI) is moving towards the 70 level with strong momentum as well as the MACD oscillator which jumped above its trigger and zero lines.



Analysis by JFD Research