EUR/GBP mildly declines despite steady UK retail sales data
- EUR/GBP marginally fell to 0.8530, tallying a two-day losing streak.
- The cross declined despite the release of steady UK retail sales data during the European session.
- The data favors that the BoE will continue cutting rates.
Friday's trading painted a slightly less vibrant picture for the EUR/GBP pair which slid to 0.8530 as investors are digesting mixed Retail Sales figures from the UK.
In July, UK retail sales showed signs of recovery, with total retail sales volume increasing by 0.5% month-on-month, slightly below expectations, but improving from a revised decline of 0.9% in June (previously reported as -1.2%). On a year-on-year basis, retail sales grew by 1.4%, matching expectations and up from a revised -0.3% in June (previously reported as -0.2%).
This increase in sales aligns with the improvement seen in the British Retail Consortium's same-store sales for July, signaling a strong start to the third quarter. Despite robust Q2 GDP figures, the June data indicated a slowdown as the quarter ended. Overall, the economic activity seems to be weak which might prompt the Bank of England to continue cutting.
EUR/GBP technical analysis
In the span of the last sessions, the EUR/GBP is primarily caught between the 200-day and 100-day Simple Moving Averages (SMAs) at 0.8550 and 0.8510 support and resistance levels respectively, and volume figures signify a gradually diminishing selling pressure. The fact that the bulls gave up the 200-day SMA on Thursday paints the outlook with bearishness.
At a technical level, the Relative Strength Index (RSI) of the pair is lingering around the mid-50s, indicating an equilibrium in market sentiment with neither the bulls nor the bears taking control but with a noticeable falling trend. The Moving Average Convergence Divergence (MACD) indicator is showing decreasing green bars, suggesting a possible downward momentum in future trading sessions.
EUR/GBP daily chart
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
