FxWirePro: EUR/GBP retraces dip below 200-DMA, pound fails to capitalize on upbeat UK data

Chart - Courtesy Trading View 

EUR/GBP was trading largely unchanged at 0.8442 at around 10:30 GMT, up from session lows at 0.8403.

The British pound failed to capitalize on upbeat UK data-led gains. Brexit woes overshadowed upbeat UK macro data and acted as a headwind.

Data released by the UK Office for National Statistics earlier on Wednesday showed that the UK economy recorded a growth of 0.5% in May as against a flat reading expected.

Upbeat data validated market bets for a 50 bps rate hike by the Bank of England in August.

EUR/GBP plunged below 200-DMA to hit fresh 8-week lows at 0.84 handle, but quickly pared losses to hover around 200-DMA.

On the other side, Eurozone’s Industrial Production increased more than expected in May, the official data published by Eurostat showed on Wednesday.

Eurozone’s Industrial Output arrived at 0.8% MoM vs. a 0.3% rise expected and 0.5% last. On an annualized basis, the Industrial Output rose by 1.6% in May versus a 0.3% growth expected and April’s -2.5%.

Upbeat Eurozone industrial figures, supported the single currency and further aided in the pair's pullback from lows.

Support levels - 0.8439 (200-DMA), 0.8420 (Lower BB)

Resistance levels - 0.8446 (5-DMA), 0.8479 (110-EMA)

Summary: EUR/GBP trades with a bearish technical bias. Watch out for decisive break below 200-DMA for further weakness.