EURGBP retreat after yesterday’s sharp gains, the British Pound attracts some bids after the first quarter UK’s GDP came down to -2% the largest fall since the financial crisis, but better than expectations of 2.5%. The monthly GDP reading for March came down to -5.8% also better than estimates of -8% and also is less severe than other European countries. The yearly GDP reading came in at -1.6%, beating the expectations of -2.1%. The figures disappoint analysts that expecting a V-shape recovery.
|Table 1: Breakdown of GDP and its components’ growth rates by month|
|January 2020||February 2020||March 2020||Quarter 1 2020|
|Index of Services||0.1%||0.0%||-6.2%||-1.9%|
|Index of Production||-0.1%||-0.1%||-4.2%||-2.1%|
ONS office warned that GDP estimates for March and Q1 are subject to more uncertainty than usual as a result of the challenges in collecting the economic data under the government’s health restrictions.
Earlier reported that the United Kingdom Industrial Production for March came in at -4.2% beating forecasts of -5.6%. The Manufacturing Production registered in at -4.6% also above the expectations of -6% for March, while the yearly reading came in at -9.7% above the expectations of -10.4%.
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EURGBP Price Support and Resistance
EURGBP is 0.18% lower at 0.8830, testing the resistance at the 50-day moving average. On the daily chart, the pair has formed a secure base at 0.8677, after the correction from 11-year highs. The outlook is positive for EURGBP pair, but failure to break above 0.8847 (50-day SMA) might trigger a correction down to 0.8716 the 200-day moving average.
On the downside, the first support for EURGBP pair stands at 0.8819 the daily low. A close below 0.8819 might test the strong support zone at 0.8716 the 200-day SMA. More bids for the EURGBP might emerge at 0.8661 the 100-day moving average.
On the other side, the first resistance stands at 0.8854 the daily top. A break above might challenge the next resistance at 0.8867 the high from April 21. If EURGBP break above 0.8867 then might test the next supply zone at 0.8965 the high from March 27.