EUR/GBP fails to surpass the 100-day SMA amid GBP’s strength

EUR/GBP retreated near 0.8630 after being rejected by the 100-day SMA at 0.8670.
Q2 GDP data from the UK avoided stagnation, surpassing market expectations.
Higher British yields help the Pound trade stronger against most of its rivals.

Patricio Martín FXStreet

In Friday’s session, the GBP traded with gains agains most of its rivals as the UK reported strong Q2 economic activity figures, which faded recession fears. On the other hand, the EUR is trading mixed, while no relevant data was released during Friday’s session.

Investors assess British solid economic data

The UK's second-quarter Gross Domestic Product (GDP) data revealed robust performance. In terms of the yearly measurement, it surged by 0.4%, surpassing both the anticipated and previous 0.2% figures. The quarter-on-quarter (QoQ) growth also stood at 0.2%, avoiding the predicted stagnation and beating the earlier 0.1% reading. In addition, Manufacturing and Industrial Production came in strong in June, seeing monthly increases of 2.4% and 1.8%, respectively, above expectations.

Reacting to the data, the British yields are seeing gains across the curve, making the GBP gain interest. The 10-year bond yield rose to 4.57% while the 2-year yield stands at 5.05% and the 5-year yielding 4.58%, respectively. In that sense, they reflect that markets expect the Bank of England (BoE) to continue hiking. According to the World Interest Rate Possibilities (WIRP) tool, investors are pricing 50 bps of additional tightening this cycle which would see the terminal rate peak at 5.75%.

EUR/GBP Levels to watch

According to the daily chart, the technical outlook for the EUR/GBP remains neutral to bearish as the bulls show signs of exhaustion and are losing traction. The Relative Strength Index (RSI) shows a weakening bullish trend with a negative slope above its midline, while the Moving Average Convergence (MACD) presents lower green bars. Furthermore, the pair is above the 20-day Simple Moving Average (SMA) but below the 100 and 200-day SMAs, indicating that the bulls aren't done yet and have some gas left in the tank.

Support levels: 0.8615, 0.8600 (20-day SMA), 0.8570.

Resistance levels: 0.8670 (100-day SMA), 0.8700, 0.8723 (200-day SMA).

EUR/GBP Daily chart

EUR/GBP

Overview
Today last price	0.8626
Today Daily Change	-0.0037
Today Daily Change %	-0.43
Today daily open	0.8663

Trends
Daily SMA20	0.8609
Daily SMA50	0.8587
Daily SMA100	0.8671
Daily SMA200	0.8725

Levels
Previous Daily High	0.8666
Previous Daily Low	0.8625
Previous Weekly High	0.8656
Previous Weekly Low	0.855
Previous Monthly High	0.8701
Previous Monthly Low	0.8504
Daily Fibonacci 38.2%	0.865
Daily Fibonacci 61.8%	0.864
Daily Pivot Point S1	0.8637
Daily Pivot Point S2	0.861
Daily Pivot Point S3	0.8596
Daily Pivot Point R1	0.8678
Daily Pivot Point R2	0.8692
Daily Pivot Point R3	0.8719

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD eases to near 1.1650, eyes US PCE for fresh impetus

EUR/USD turns south to test 1.1650 in European trading on Friday, facing rejection once again near seven-week highs. The pair, however, continues to draw support from persistent US Dollar selling bias, despite a cautious market mood. Traders now await the US September PCE inflation and UoM Consumer Sentiment data.

GBP/USD holds gains near 1.3350 ahead of US data

GBP/USD sticks to a positive bias near 1.3350 in the European session on Friday. Traders prefer to wait on the sidelines ahead of the key US inflation and sentiment data due later in the day. In the meantime, broad-based US Dollar weakness helps the pair stay afloat.

Gold remains below $4,250 barrier as traders await US PCE data for directional impetus

Gold gains some positive traction on Friday, though it remains confined in the weekly range. Dovish Fed expectations continue to undermine the USD and lend support to the commodity. Bulls, however, might opt to wait for the US PCE Price Index before placing aggressive bets.

UoM Consumer Sentiment Index expected to post a mild recovery in December

December’s preliminary Michigan Consumer Sentiment Index is forecast to have picked up to 52 from a three-year low of 51.0 in November. A stalled labour market and higher price pressures are likely to weigh on consumers’ confidence.

Canada Unemployment Rate expected to edge higher in November ahead of BoC rate decision

Statistics Canada will release its Labour Force Survey on Friday, and markets are bracing for a weak print. The Unemployment Rate is expected to tick higher to 7% in November, while the Employment Change is forecast to come in flat after a nice gain in October.

Pi Network Price Forecast: Bearish streak nears critical support trendline

Pi Network (PI) edges lower on Friday for the third consecutive day, approaching a local support trendline. The on-chain data suggests an increase in supply pressure as Centralized Exchanges (CEXs) experience a surge in inflows.