EUR/GBP Price Analysis: Grinds lower around 0.8450 on unimpressive UK GDP

EUR/GBP drops to multi-month low, bears have the upper hand near mid-0.8300s

  • EUR/GBP renews intraday high, before ticking lower, while staying inside a trend widening chart pattern.
  • UK Q2 GDP shrank 0.1% QoQ versus -0.2% expected, monthly statistics came out softer on MoM, firmer on YoY.
  • Double top around 0.8470 tests bulls, bears need validation from 200-HMA.

EUR/GBP remains pressured around 0.8460-55 area after an initial wick to 0.8447 on the UK’s firmer-than-expected growth numbers. However, the actual figures are way low under the previous readings and hence keep buyers hopeful despite the initial pullback.

That said, the headline UK Q2 GDP flashed -0.1% QoQ figures versus -0.2% forecast and 0.8% previous readings, per the first estimations from the UK’s National Statistics. Additionally details suggest that the monthly GDP contracted 0.6% MoM versus -1.3% expected and 0.5% prior. Further, the Industrial Production and Manufacturing Production readings marked upbeat YoY figures while reporting the softer monthly data, which are better than forecast disappointed.

Also read: GBP/USD seesaws 30-pip around 1.2200 on better-than-expected Q2 UK GDP

It should be noted that the trend widening megaphone formation restricts the EUR/GBP moves between 0.8480 and 0.8420.

However, the latest bearish signals from the MACD hint at the quote’s weakness towards the support. Also acting as the downside filter is the 200-HMA level of 0.8415.

Meanwhile, the double tops around 0.8470 guard immediate recovery moves of the EUR/GBP ahead of the 0.8480 hurdle comprising the stated megaphone’s upper line.

In a case where the quote rises past 0.8480, the odds of witnessing the 0.8500 threshold on the chart can’t be ruled out.

EUR/GBP: Hourly chart

Trend: Gradual upside expected

 

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