EURGBP Seesaws After Dismal Industrial Production Data
EURGBP trades slightly lower today after three days of gains as investors focus on economic data and infection numbers amid fears of the second round of infections.
The Eurozone industrial production dropped by a record 17.1% in April, better than most economists had expected as the coronavirus lockdown caused significant disruption to businesses.
Over the last year, industrial production has fallen 28% across Eurozone. The industrial production in the euro area has fallen to levels seen in the mid-1990s. The Euro area activity is expected to rebound in the third quarter as the lockdown measures are eased, supported by favourable financing conditions, an expansionary fiscal policy, and a resumption in global activity. Germany’s Economy Minister Altmaier said that the government wants the German economy to hit bottom in the second half should the relief package have the desired impact.
From the UK, industrial production fell by 20.3% below the forecasts of -15%. United Kingdom Gross Domestic Product shrank by -20.4%, below the expectations of -18.4% in April, which was a month with the full lockdown. The UK Index of Services registered in at -9.9% below the consensus -2%. Consumer Inflation Expectations came down to 2.9% from the previous 3%.
On the Brexit front, a call between the UK and European Union (EU) leaders has scheduled for June 15 at 12:30GMT.
EURGBP is 0.10% lower at 0.8963, as bulls are in full control of the pair despite the short pullbacks. The technical outlook for EURGBP pair is bullish, and only a break below the 50-day moving average might halt the positive momentum.
On the flip side, the initial support for EURGBP stands at 0.8948 the daily low. A close below 0.8948 might challenge the next support area at 0.8909 the low from yesterday’s trading session. More support for the pair might emerge at 0.8861 the low from June 9.
On the other side, the first resistance for EURGBP stands at 0.8991 the daily top. A break above 0.8991 might test the next hurdle at 0.9016 the high from yesterday’s trading session. If the EURGBP breaks above, then might challenge the next supply zone at 0.9050 the high from May 29.