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EUR/GBP reverts to 0.7500 on poor UK data

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 12, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The cross in the EUR/GBP found renewed strength and swung back higher towards 1.75 handle, after the pound was hammered to lows following the releases of disappointing UK factory data.

    EUR/GBP sees a 20-pips swift recovery post UK data

    Currently, the EUR/GBP pair rises 0.40% to 0.7497, jumping of strong support placed at 0.7477, where hourly 20-SMA intersects. The pound was smashed to fresh multi-five year lows below 1.45 handle against the greenback after the downbeat UK industrial figures cast doubts over the UK’s economic outlook. Hence, the EUR/GBP cross benefited from the broad GBP weakness and reverted to 0.7500 levels.

    The UK manufacturing production fell by 0.4% m/m, after posting a same decline of 0.4% a month before. Markets expected a bounce to 0.1% growth. Total industrial production, which includes data on the extraction of oil and gas from the North Sea, also declined 0.7% in November, following a 0.1% rise a month before and compared to the 0.0% growth expected.

    While, the upside in the EUR/GBP cross remains capped on the back renewed weakness in EUR/USD after the greenback moved higher across the board. Looking ahead, the focus now remains on the comments from BOE Governor Mark Carney and ECB’s Weidmann due later today.

    EUR/GBP Technical Levels


    To the upside, the next resistance is located at 0.7555 (Jan 11 High), above which it could extend gains to 0.7596 (Feb 2015 High). To the downside immediate support might be located at 0.7452 (daily low) below that at 0.7402 (1h 200-SMA).
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