- Summary:
- EURGBP pressures continue amid general euro weakness. Weak economic data out of Germany and renewed recession fears push the common currency lower.
EURGBP pressures continue amid general euro weakness. Weak economic data out of Germany and renewed recession fears push the common currency lower.
The European Commission in its Winter 2020 Economic Forecast report left its growth forecast for the eurozone for 2020 and 2021 unchanged at 1.2%. The German GDP forecast raised to 1.1% from 1% for 2020, 2021. France GDP for 2020 lowered to 1.1% from 1.3%. The Italy GDP for 2020 reduced to 0.35 from 0.4%.
Earlier today the Germany Consumer Price Index came in at 1.7% in line with expectations for January. But the German industrial production dropped 3.5% in December, plunging the most since the global financial crisis. The figure is another reminder that Europe’s largest economy is far from overcoming the manufacturing recession.
On the other hand, the UK monthly GDP for December came in at +0.3% topping the forecasts of +0.2%. The UK factory data showed that the Manufacturing production came in at +0.3% below the expectations of +0.5%. The yearly Manufacturing production reported at -2.5% also below the forecasts of -1.0%. The Construction output came in at +0.4% topping the estimates of -0.4%. The economic data shows a pick up after the Boris Johnson win in December election.
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EURGBP Price Analysis
EURGBP is 0.20% lower making fresh two month lows as the beaaars jumbed in after the EURGBP pair broke below the 50-day moving average. The EURGBP technical outlook is bearish and any move to the upside would meet selling pressure.
On the downside, initial support for the EURGBP pair stands at 0.8371 the daily low. A break below that support level would open the way for a move down to 0.8359 the low from December 17. Next level to watch is the low from December 16 at 0.8303.
On the upside, the first obstacle will be met at 0.8400. The critical resistance point is at 0.8473 the 50-day moving average. Next supply zone stands at 0.8504 the high from February 10 session.