EUR/GBP quickly recovers UK data-led dip, turns flat around 0.9180

Haresh Menghani FXStreet

For the second straight session the EUR/GBP cross faced rejection at the 0.9200 handle and refreshed session lows post-UK data.

The cross met with some fresh supply after data released from the UK showed that the overall industrial output rose modestly in July. Adding to the positive manufacturing sector data, UK goods trade deficit came-in at £11.58 billion for July, while previous month's reading was also revised up to show a deficit £11.53 billion as compared to £12.722 billion reported earlier.

• UK manufacturing production beats expectations in July

Meanwhile, the market reaction to the data turned out to be short-lived, with the cross quickly rebounded few pips to currently trade around the 0.9175-80 region amid post-ECB bullish sentiment surrounding the EUR/USD major.

With the UK data out of the way, end-of-the week profit taking, back towards 0.9140-35 support area, now seems a distinct possibility.

Technical levels to watch

A follow through weakness below the mentioned support is likely to accelerate the fall towards the 0.9100 handle before the cross eventually drops to its next horizontal support near the 0.9085-80 region.

On the upside, the 0.9200 handle remains immediate strong supply zone, which if conquered might trigger a short-covering rally back towards 0.9260-65 hurdle en-route the 0.9300 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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