Key Points
- The Euro after trading close to 0.8995-0.9000 against the British Pound started correcting lower.
- The EURGBP pair is currently following a descending channel pattern with resistance near 0.8940 on the hourly chart.
- Today in the Euro Zone, the preliminary French Gross Domestic Product reading for Q2 2017 was released by INSEE.
- The outcome was around the forecast, as the French GDP is expected to increase by 0.5% in Q2 2017 (QoQ).
EURGBP Technical Analysis
The Euro gained a lot of momentum during the past few weeks and traded above 0.8900 and 0.8950 against the British Pound. The EURGBP pair traded towards the 0.8995-0.9000 levels before facing a major hurdle.
The pair corrected lower, and following a descending channel pattern with resistance near 0.8940 on the hourly chart. It tested the 61.8% Fib retracement level of the last wave from the 0.8829 low to 0.8995 high.
The pair bounced well from 0.8900 and currently positioned well above the 21 hourly simple moving average. It seems like the pair is attempting a move above the channel resistance 0.8940. On the downside, the 21 hourly simple moving average and the 0.8900 level are key supports.
French GDP
Today in the Euro Zone, the preliminary French Gross Domestic Product reading for Q2 2017 was released by INSEE. The market was positioned for an increase of 0.5% compared with the previous quarter.
The actual result was around the forecast, as the French GDP is expected to increase by 0.5% in Q2 2017. The report added that:
Households’ consumption accelerated slightly (+0.3% after +0.1%) whereas total gross fixed capital formation (GFCF) decelerated markedly (+0.5% after +1.4%). All in all, final domestic demand excluding inventory changes contributed +0.4 points to GDP growth, as in the previous quarter.
Overall, there is a high chance that the EURGBP pair would break 0.8940 for an upside push in the near term.
