Euro holds steady against Pound Sterling despite steady UK growth
EUR/GBP is trading sideways on Thursday near the 0.8540 level, with the Euro (EUR) steadying after three consecutive days of losses despite the Pound Sterling (GBP) gaining support from UK economic growth data that was broadly in line with expectations.
Data from the UK Office for National Statistics showed the Gross Domestic Product (GDP) grew a steady 0.4% in the second quarter, matching forecasts though slowing from the pace seen in the previous quarter. A firmer-than-expected monthly reading for June added to the picture, giving the Pound a small lift.
Factory data curbed the optimism. Both Industrial Production and Manufacturing Production shrank in June, worse than the market had anticipated, with the prior month's figures revised lower. The prints are a reminder of the drag from higher energy prices tied to the Middle East conflict.
Attention now turns to Friday's Eurozone flash releases, with second-quarter Gross Domestic Product (GDP) seen holding at a steady 0.4% on the quarter, and the Employment Change for Q2 Prints in line would keep the Euro side quiet; any surprise could hand EUR/GBP its next push.
Technical Analysis:
On the 4-hour chart, EUR/GBP trades at 0.8544, keeping a mildly bearish near-term tone as it holds below the 100-period Simple Moving Average (SMA) at 0.8556 while testing the 20-period SMA at 0.8544 as a pivot. The cluster of overhead levels around 0.8546 and 0.8553 reinforces a capped structure, with the Relative Strength Index (RSI) at 44 hinting at balanced but slightly soft momentum rather than aggressive selling.
On the topside, immediate resistance is seen at 0.8546, followed by the horizontal barrier at 0.8553 and the 100-period SMA at 0.8556, which collectively form a dense supply zone that bulls would need to reclaim to ease downside pressure. On the downside, initial support is located at 0.8542 ahead of 0.8539, where a break lower would open the door to a deeper pullback, while holding above these levels would keep the cross in a consolidative range beneath the moving average cap.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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