Key Points
- The Euro declined heavily during the past 24 hours against the British Pound to trade below 0.8840.
- There was a monster support area at 0.8860 in EURGBP, which was broken to clear the way for more declines.
- Today in the Euro Zone, the French Industrial Output report was released by INSEE.
- The result was on the lower side, as there was a decline of 1.1% in Sep 2016, and the market was expecting no change.
EURGBP Technical Analysis
The Euro after trading as high as 0.9027 against the British Pound failed, and declined. The EURGBP pair traded lower, and broke a major support area at 0.8860 to trade as low as 0.8766.
The pair is consolidating in a range, and formed a contracting triangle pattern. It has a resistance near the triangle upper trend line and the 23.6% Fib retracement level of the last decline from the 0.9027 high to 0.8766 low.
A break below the triangle support area is very likely, which will open the doors for more losses in the near term.
French Industrial Output
Today in the Euro Zone, a low risk event, the French Industrial Output, which shows the volume of production of French industries such as factories and manufacturing was released by INSEE.
The market was aligned for no change in the output in in Sep 2016, compared with the previous month. However, the result was disappointing, as there was a decline of 1.1%. The report added that “Over the third quarter of 2016, output grew slightly in the manufacturing industry (+0.2%) compared to the previous quarter. It was virtually stable in the overall industry (-0.1% q-o-q), due to a sharp fall in mining and quarrying; energy; water supply (-2.0%).”
Overall, there is nothing going for the Euro, and it may decline towards the 0.8750 level against the British Pound.
