EUR/GBP Erases Recovery Gains to 0.7840, Trading Flat Around 0.7800
EUR/GBP Erases Recovery Gains to 0.7840, Trading Flat Around 0.7800
The EUR/GBP cross erased all of its Wednesday's up-move and turned flat as renewed GBP buying interest emerged after surprisingly strong manufacturing and industrial production data.
Earlier during the day, the Office for National Statistics (ONS) published the UK industrial and manufacturing production data for the month of April. According to the data, manufacturing output rose 2.3% in April, driving the overall industrial production higher by 2% m/m. The readings surpassed even the most optimistic estimates and were far better than growth recorded in March.
Surprisingly positive manufacturing data further fueled volatility across GBP pair, which continues to be driven by sentiments surrounding 'Brexit' and its implication on the UK economy.
Technical outlook
Yann Quelenn, Market Analyst at Swissquote Bank SA notes, "EUR/GBP's medium-term momentum seemed to have ended but is now reborn. Hourly resistance can be found at 0.7905 (06/05/2016 high) while hourly support can be found at 0.7720 (03/06/2016 low). Expected to show further weakness towards support at 0.7720."
"In the long-term, the pair is currently recovering from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading very close from its 200 DMA. Strong resistance can be found at 0.8815 (25/02/2013 high)."
