EUR/GBP dips to the 0.8660 area following mixed UK data
- The Euro fails at 0.8690, the 61,8% Fib. retracement of the late November decline.
- UK economy contracted in the third quarter, against expectations.
- UK retail sales bounce up unexpectedly and ease negative pressure on the Pound.
The Euro rally from early - December lows has been capped at the 0,8690 resistance area, and the pair is losing ground on Friday´s European session, returning to the mid-range of 0.8600.
The Pound remains steady despite mixed UK data
Data from the UK released earlier today revealed that the GDP contracted in the third quarter, against the previous estimate of a flat reading, and following a 0.2% advance in the second quarter.
On the positive side, retail sales increased by 0.1%, to put an end of more than one year of declines, against the market consensus of a 1.3% drop. These figures have offset the negative impact of the downward GDP revision, cushioning bearish pressure on the Pound.
In Europe, Italian and French have posted better than expected readings, while the Spanish GDP confirmed a 0.3% growth in the third quarter and 1.8% year-on-year advance. The impact of these figures on the Euro, however, has been marginal.
The technical picture shows the pair pulling back from the 61.8% Fibonacci retracement of the late November sell-off, at 0.8690. Although the pair maintains its broader positive trend intact, this is a common target for corrective reactions.
Support levels are at the 0.8645 previous high, which closes the path towards 0.8600 and the December 11 low at 0.8550. Resistances are the mentioned 0.8690 and 0.8725.
Technical levels to watch