EUR/GBP Price Analysis: Bulls Pause at 0.8550 After Poor UK GDP
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- EUR/GBP bulls remain cautious as UK GDP data is released.
- US CPI, US dollar dominate headlines, risk-averse sentiment prevails.
- As the EUR/GBP trades mildly, forex traders are looking at broader macros.
The EUR/GBP price analysis poses a positive outlook. Although the price is consolidating in a tight range near key levels.
In the European session on Thursday, the EUR/GBP pair trades around 0.8560. This is ahead of multiple data releases from the Eurozone and the UK due later in the day and on Friday.
The bullish momentum in the pair paused after gross domestic product (GDP) data for the third quarter of 2021. The UK economy saw a growth of 1.3% against the forecast of 1.5%. As a result of easing virus restrictions, the country weathered the recession caused by the pandemic and experienced an improvement in the second quarter.
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However, things improved in the third quarter. Nevertheless, due to the surge in new COVID-19 cases, the currency pair has faltered due to slower gains in the UK during the third quarter and self-isolation restrictions due to less robust demand. Furthermore, the upcoming release of production and industry data will add to the pair. Additionally, the gray clouds of Brexit are fighting over Article 16, which is keeping the currency under pressure.
Later today, the European Commission will present its economic forecast for autumn 2021. Moreover, the EcoFin meeting and data on industrial production will provide some cross-border trade incentives. The Eurozone will release economic reports on Friday, which may affect the pair’s value.
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EUR/GBP price technical analysis: Bulls stay cautious
The EUR/GBP price consolidates in a tight range above the 20-period SMA on the 4-hour chart. The price is wobbling around, trying to find the clear directional bias. If the bulls fuel up, the price may see a retest of Nov 05 highs around 0.8590. Further resistance levels can be seen around 0.8625 and 0.8655.
If the price closes below 20-period SMA, it may trigger selling, leading to support levels at 50-period SMA (0.8530) ahead of 200-period SMA (0.8505).
