EURGBP @ 6.74095 – Support/Resistance analysis: finds offers around 0.8470 ahead of UK GDP data

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EURGBP @ 6.74095 – Support/Resistance analysis: finds offers around 0.8470 ahead of UK GDP data

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• EUR/GBP is sensing selling interest around 0.8470 despite the lower consensus for UK economic data.
• UK households are making higher payouts as subdued earnings are unable to offset soaring inflation.
• The second-tier Eurozone data is expected to display a vulnerable performance.

The pair currently trades last at 6.74095.

The previous day high was 0.847 while the previous day low was 0.8421. The daily 38.2% Fib levels comes at 0.8451, expected to provide support. Similarly, the daily 61.8% fib level is at 0.844, expected to provide support.

The EUR/GBP pair is facing barricades around the immediate hurdle of 0.8465 continuously since Thursday. The asset is expected to display topsy-turvy moves as investors await the UK Gross Domestic Product (GDP) data. On a broader note, the cross is advancing sharply higher in entire August after printing a three-month low of 0.8340.

According to the preliminary estimates, the UK economy has shrunk by 0.2% in the second quarter of CY2022 vs. the expansion of 0.8% recorded in Q1CY22. Also, the annual data is expected to shift lower to 2.8% from the prior release of 8.7%. A downside print in the growth rate indicates that the overall demand has dived significantly and eventually, the economic activities are facing a slowdown.

Soaring price pressures along with subdued Labor Cost Index are responsible for downward estimates of UK GDP data. The households are facing the headwinds of higher payouts due to surging cost pressures. Over that, subdued Average Hourly Earnings have forced them to slash their overall demand.

Adding to that, the Manufacturing Production data is also expected to display a vulnerable performance. The economic data is expected to slip lower to 0.9% against the former release of 2.3% on an annual basis. Adding to that, the monthly data is expected to display a de-growth of 1.8% against the previous print of 1.4%.

On the Eurozone front, Eurostat will report the Industrial production data, which are seen lower at 0.2% and 0.8% from their prior releases on a monthly and an annual basis respectively.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8462 at the time of writing. Pair opened at 0.8458 and is trading with a change of 0.05 % .

The pair is trading above its 20 Daily moving average @ 0.8443, below its 50 Daily moving average @ 0.8511 , below its 100 Daily moving average @ 0.8471 and above its 200 Daily moving average @ 0.8441

The previous day high was 0.847 while the previous day low was 0.8421. The daily 38.2% Fib levels comes at 0.8451, expected to provide support. Similarly, the daily 61.8% fib level is at 0.844, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.8429, 0.84, 0.838
• Pivot resistance is noted at 0.8478, 0.8499, 0.8528

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