FxWirePro: EUR/GBP holds marginal gains, pound brushes aside upbeat UK macro releases

EUR/GBP chart - Trading View 

EUR/GBP has erased gains on the day and has slipped lower from session high at 0.8791 to trade largely muted at 0.8777 at around 10:30 GMT.

The pound showed a rather muted reaction to the UK macro which showed that the domestic economy recorded a stronger-than-expected growth in December. 

The UK has reported a Gross Domestic Product growth rate of 1.2% in the fourth quarter of 2020, beating economists' consensus.

UK Trade Balance showed that deficit fell more-than-anticipated, to £14.315 billion in December from £16.012 billion previous.

UK Manufacturing and Industrial output however, missed market expectations and increased by 0.3% and 0.2%, respectively. 

Pound is likely to be supported on optimism that the coronavirus vaccination drive could facilitate an earlier easing of lockdown restrictions in the UK.

EUR/GBP trades with a major bearish bias. Recovery attempts lack traction. 'Death Cross' on the daily charts keeps bias lower.

Downside has currently paused at 61.8% Fib (0.8743). Break below will see resumption of weakness. Next major support lies at 0.8693 (55 month EMA).

Price action has edged above 5-DMA with little scope for further gains. Decisive break above 200H MA could see gains till stiff resistance at 0.8827 (21-EMA).