EUR/GBP Drops to 0.7650 After Solid UK Retail Sales Growth

EUR/GBP Drops to 0.7650 After Solid UK Retail Sales Growth

19 May 2016, 11:34
Roberto Jacobs

EUR/GBP Drops to 0.7650 After Solid UK Retail Sales Growth

The EUR/GBP pair faded its tepid bounce to 0.7700 during Asian session and built on to the Wednesday's sharp slide after the UK retail sales recorded a solid rebound in the month of April.

According to the data released just a while ago, UK retail sales for April witnessed a solid growth of 1.3% as compared to a 1.3% decline registered in March. Consensus forecast did point to a rebound in April, but the actual print surpassed even the most optimistic estimates.

Earlier during the week on Tuesday, the pair broke-down from its short-term recent trading range and was knocked down on Wednesday after the shared currency got a double whammy from rising support for the UK to remain within EU and hawkish Fed minutes.

After today's UK retail sales data, the pair extended its fall and dropped to the lowest level since early Feb. to currently trade near the mid-point of 0.7600 handle.

Technical levels to watch

From current levels the downward momentum seems to drag the pair immediately towards 0.7615-0.7600 round figure mark support. Although the momentum seems strong enough to warrant further down-slide, but with daily RSI reading below 30 is already pointing towards near-term oversold condition. Hence, the bears are likely to take some breather around 0.7600 handle.

Meanwhile, attempts of recovery might now confront immediate resistance near 0.7680-90 zone, which if cleared should assist the pair towards 0.7720 resistance area. This 0.7720 now seems to cap any near-term recovery for the pair.


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