EUR/GBP fails to rally beyond 0.8700 despite upbeat Eurozone data
- The Euro retreats from the 0.8700 area despite positive macroeconomic data.
- German economic sentiment and Eurozone Industrial Production have shown larger-than-expected improvements.
- EUR/GBP is showing signs of a potential bearish correction.
The Euro is trading lower against the Pound on Tuesday. The strong German economic sentiment and upbeat Eurozone Industrial Production figures have failed to push the pair above the 0.8700 level. However, price action remains at its highest levels in the last three months.
The broader trend remains positive, as the common currency continues to show a sequence of higher highs and higher lows, appreciating 3.8% from May’s lows. Technical indicators, however, have reached oversold levels, and the 4-hour RSI exhibits a bearish divergence, which may signal a potential bearish reversal.
Data from the ZEW Economic Research Institute, released on Tuesday, suggests that investors’ sentiment about the economic outlook has improved to 52.7 from 47.5 in May, well above market expectations of a 50.0 reading.
Likewise, their opinion about the current economic situation has improved to -59.5, from -72.0 in the previous month, also beating the -65.5 reading anticipated by the market consensus.
Eurozone’s Industrial Production has also posted a positive surprise. Factory activity accelerated by 1.7% in May, beating expectations of a 0.6% growth, while April's reading was revised higher to a 2.2% contraction from the previously estimated 2.4% fall.
Economic Indicator
Industrial Production s.a. (MoM)
The Industrial Production index, released by Eurostat on a monthly basis, measures changes in the price-adjusted output of industry. It is a widely-followed indicator to gauge the strength in the Eurozone’s manufacturing sector. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.
Read more.Last release: Tue Jul 15, 2025 09:00
Frequency: Monthly
Actual: 1.7%
Consensus: 0.9%
Previous: -2.4%
Source: Eurostat
Economic Indicator
ZEW Survey – Economic Sentiment
The Economic Sentiment published by the Zentrum für Europäische Wirtschaftsforschung measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic. A positive number means that the share of optimists outweighs the share of pessimists. usually, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).
Read more.Last release: Tue Jul 15, 2025 09:00
Frequency: Monthly
Actual: 36.1
Consensus: 37.8
Previous: 35.3
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
