EUR/GBP Awaits Trading Range Break-Out to Confirm Near-Term Direction
EUR/GBP Awaits Trading Range Break-Out to Confirm Near-Term Direction
The EUR/GBP pair remains trapped within a seven-day trading range to currently trade absolutely flat from yesterday’s close at 0.7870.
The Euro bulls was not benefited by upbeat German GDP that posted a 0.7%
growth during the first quarter of 2016 over 0.3% growth recorded in
the previous quarter. The muted reaction to stronger-than-expected
German GDP print could be attributed to weaker German CPI number that
continued to raise concerns over the ongoing deflationary pressure in
the region.
Investors now shift their focus to the flash estimate of overall
Euro-zone growth figure for the first quarter of 2016 and US monthly
retails sales data, which would provide some momentum to the EUR/USD and
GBP/USD majors and eventually to the EUR/GBP cross.
Technical levels to watch
On the immediate upside, momentum above 0.7900 handle would bring 0.7925
resistance back into the picture, which is followed by two-week high
resistance near 0.7950. Only a decisive strength above 0.7925-50 area,
the top end of the trading range, would increase the prospects of
further up-move for the pair in the near-term.
On the flip side, sustained weakness below 20-day SMA support near
0.7860, leading to a follow through weakness below Thursday’s low of
0.7846, would open room for further downside in the near-term, initially
towards 0.7790 horizontal support and eventually towards April lows
support near 0.7740-35 area.
