EUR/GBP Stable Around 100-DMA, UK Manufacturing Data Eyed
Following an intra-day sharp slide of over 100-pips and a subsequent recovery to half-way mark on Tuesday, the EUR/GBP cross seems to have found equilibrium on Wednesday and is currently trading around 100-day SMA near 0.7800 region.
On Tuesday, the British Pound found extra buying interest after the latest Times YouGov polls on EU referendum in the UK revealed that voters were seen leaning towards a vote for the UK to remain in the EU.
Meanwhile, final GDP print from the Euro-zone, released on Tuesday, confirmed that the region grew 0.6% in the first-quarter of 2016. The reading was slightly better-than consensus estimate of a 0.5% growth and thus assisted the shared currency to recover some lost ground against the British counterpart.
On Wednesday, the economic calendar has nothing to offer from the Euro-zone while from the UK, markets will await for the release of manufacturing and industrial production data for the month of April. However, given the uncertainty surrounding 'Brexit', the relative outperformance of the British Pound against its European counterpart is likely to be limited.
Technical levels to watch
From current levels, weakness back below 0.7800 region (100-day SMA) is likely to find support near weekly swing lows near 0.7750 level. This is closely followed by support near 0.7730 horizontal area, below which the pair is likely to extend its weakening trend towards retesting 0.7665-60 strong support.
On the flip side, 0.7820 zone seems to provide some immediate resistance on the upside, which if cleared should assist the pair to resume its near-term upward trajectory and dart back towards reclaiming 0.7900 handle with intermediate resistance near 0.7860 level.