EUR/GBP post modest gains in the week, up almost 1%, eyes 0.8600

EUR/GBP rises 0.22% on weak UK economic data.
UK’s retail sales data drop 2.5% vs 0.4% expected.
The short-term trend is up, however stronger UK economic data, supports the British pound.

Christian Borjon Valencia FXStreet

The EUR/GBP rises for the second day in a row, modestly gain 0.22%, trades around 0.8580. For the second week in a row, recovers some lost ground against the pound.

In the dockets for the Eurozone, the German PPI on the monthly basis came at 1.9% versus an 0.8% foreseen, In regards to the UK, consumer confidence and retail sales were released. The UK’s GfK Consumer confidence dropped to -8 from -7 expected, nevertheless remained around pre-pandemic levels. In regards to retail sales for the month of July, the report disappointed, with a drop of 2.5% in the last month, against the market’s expected 0.4% growth.

For the next week on Monday, PMI figures are released for the UK, French, Germany, and the Eurozone.

EUR/GBP technical outlook

The EUR/GBP trades around 0.8576 in between the 100 and the 50-daily moving averages, while the 200-DMA stands at 0.8710. In the short term, the pair is in an uptrend. Strong resistance lies at the confluence of the 100-DMA and a psychological round level at 0.8600, whereas the July 20 high at 0.8669 is the second resistance, followed by 0.8700. On the other hand, the first support is the 50-DMA at 0.8550, followed by the 0.8500 and then this year low at 0.8450.

RSI is at 60.61, supporting the bullish trend while the Average True Range is 36 flattish.

Author

Christian Borjon Valencia

FXStreet

Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.

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