Key Highlights
- The Euro after breaching 0.9000 traded as high as 0.9119 against the British Pound.
- There is a key bullish trend line forming with support at 0.9060 on the 4-hours chart of EUR/GBP.
- Germany’s Gross Domestic Product preliminary reading for Q2 2017 came in at 0.6% (QoQ), down from the last +0.7%.
- Today, the US Retail Sales figure for July 2017 will be released, which is forecasted to increase by 0.4% (MoM).
EURGBP Technical Analysis
The past few months were mostly bullish for the Euro as it traded above 0.9000 against the British Pound. The EUR/GBP pair recently traded as high as 0.9119 and currently correcting lower.
Looking at the 4-hours chart of EUR/GBP, there is a key bullish trend line forming with support at 0.9060. The recent failure near 0.9120 was from a connecting resistance trend line.
At the moment, the pair is correcting lower and already trading below the 23.6% Fib retracement level of the last wave from the 0.9007 low to 0.9119 high.
There is a chance that EUR/GBP might continue to correct lower towards 0.9060. The mentioned 0.9060 is also the 50% Fib retracement level of the last wave from the 0.9007 low to 0.9119 high.
Therefore, the pair is likely to find buyers near 0.9060. On the upside, an initial resistance is near 0.9100, followed by the recent high of 0.9119.
Germany’s Gross Domestic Product
The Euro Zone today saw the release of the German Gross Domestic Product for Q2 2047 (Preliminary reading) by the Statistisches Bundesamt Deutschland. The market was aligned for an increase of 0.7% in the GDP compared with the previous quarter.
The actual result was disappointing, as the German GDP is expected to grow at 0.6% in Q2 2017. It is less than the last +0.7%. In terms of the yearly change, the German GDP is expected to grow at 0.8% in Q2 2017, which is a lot less than the last +3.2% and the forecast +1.9%.
The report pointed out that:
The calendar effect in the first two quarters of 2017 was above average because, in the first quarter, there were 3 working days more and, in the second quarter, there were 3 working days less than a year earlier. When calendar-adjusted, GDP growth in the second quarter of 2017 was 2.1% (following 2.0% in the first quarter of 2017).
Overall, the EUR/GBP pair may continue to correct lower, but more likely to find support near 0.9060 or 0.9010 in the medium term.
