EUR/GBP fast approaching 0.8700 handle after mixed UK data

The EUR/GBP cross held on to recovery gains and is now seen making a fresh attempt towards reclaiming 0.8700 handle after mixed UK economic data. 

Currently trading around 0.8695 region, the cross caught fresh bids after a higher-than-expected rise in the UK trade deficit. In fact, UK goods trade balance for November came-in to show a deficit of £12.163 billion as compared to £9.885 billion deficit reported in the previous month and £11.20 billion expected. 

The disappointing goods trade balance data negated the positive effect of upbeat manufacturing and industrial production data that surpassed expectations and came-in to show a strong monthly growth of 1.2% and 2.1% respectively. 

Following yesterday's sharp reversal from two-month high, today's disappointing UK goods trade balance data helped the cross to regain traction on Wednesday.

Technical levels to watch

Immediate downside support is pegged near 0.8665-60 region below which the cross is likely to drift back towards 100-day SMA resistance break-point, now turned support, near 0.8630 region. 

On the upside, a follow through buying interest above 0.8700 handle seems to assist the cross back towards two-month high resistance near 0.8765 region, touched on Tuesday.

1 Week
Avg Forecast 0.8675
  • 75% Bullish
  • 25% Bearish
  • 0% Sideways
Bias Bullish
1 Month
Avg Forecast 0.8685
  • 73% Bullish
  • 27% Bearish
  • 0% Sideways
Bias Bullish
1 Quarter
Avg Forecast 0.8732
  • 64% Bullish
  • 27% Bearish
  • 9% Sideways
Bias Bullish