Pound-to-Euro Exchange Rate: Downtrend to Extend, Eyes on May's Resignation

Pound Sterling suffered a 14th consecutive daily decline against the Euro on May 23, confirming the entrenched downtrend that has been in place since May 06 continues to guide the exchange rate lower.

The future of Prime Minister Theresa May is a key source of uncertainty weighing on Sterling: Her resignation would see some of that uncertainty evaporate and usher in a potential bounce in the value of Sterling.

The Pound-to-Euro rate was stable Tuesday after a week of punishing losses but this newfound poise might not last for long, according to analysts at Morgan Stanley, who're are telling clients to bet on further losses during the weeks ahead.

The Pound's losing streak against the Euro could be snapped on Monday, but strength is expected to be temporary.

From a technical perspective, the British Pound is in an established downtrend against the Euro which is expected to extend, but oversold conditions make us wary of a bounce.

The Pound-to-Euro rate has broken below a key floor at the March 21 lows at 1.1466, signalling the possible onset of a much more bearish environment for the pair.

Pound Sterling has fallen for seven consecutive days, one of its longest losing streaks in months as pessimism over the state of cross-party Brexit talks combines with global trade war fears, however there is technical evidence that suggests the selling pressures might soon fade.

The Pound-to-Euro rate entered the new week trading around 1.1571 at the start of the new week after closing a full one and a half percent lower than a week ago.