ANALYSIS : EUR/GBP recedes from 6-month tops above 0.9000
- EUR/GBP moves above 0.9000 and retreats afterwards.
- UK Manufacturing Production expanded less than expected in May.
- UK monthly GDP came in at 0.3%, in line with estimates.
The better tone in the single currency and the Sterling are now motivating EUR/GBP to ease a tad from earlier multi-month tops beyond the psychological 0.9000 mark.
EUR/GBP corrects lower post-data
The British Pound met extra buying interest and dragged the cross lower after UK monthly GDP surprised to the upside on a 3M/3M basis, showing the economy expanded 0.3% (from a 0.4% expansion).
On the not-so-bright side, results from the industrial and manufacturing sectors showed the likeliness of a recovery stays subdued to say the least. In fact, Industrial Production and Manufacturing Production expanded 1.4% MoM in May while the trade deficit shrunk to £11.52 billion during the same period.
No news on the Brexit limbo, while candidates B.Johnson and J.Hunt keep debating over negotiations on the UK-EU divorce and the recent diplomatic dispute involving President Trump and UK Ambassador Sir Kim Darroch.
In the meantime, the rally in the European cross remains well and sound, underpinned by rising SMAs and the cautious/bearish view around the Sterling in the near/medium terms.
EUR/GBP key levels
The cross is gaining 0.04% at 0.8993 and a break above 0.9010 (monthly high Jul.10) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3). On the other hand, the next down barrier aligns at 0.8940 (21-day SMA) seconded by 0.8872 (low Jun.20) and then 0.8826 (low Jun.5).