EUR/GBP post modest gains in the week, up almost 1%, eyes 0.8600

• EUR/GBP rises 0.22% on weak UK economic data.
• UK’s retail sales data drop 2.5% vs 0.4% expected.
• The short-term trend is up, however stronger UK economic data, supports the British pound.

The EUR/GBP rises for the second day in a row, modestly gain 0.22%, trades around 0.8580. For the second week in a row, recovers some lost ground against the pound.

In the dockets for the Eurozone, the German PPI on the monthly basis came at 1.9% versus an 0.8% foreseen, In regards to the UK, consumer confidence and retail sales were released. The UK’s GfK Consumer confidence dropped to -8 from -7 expected, nevertheless remained around pre-pandemic levels. In regards to retail sales for the month of July,  the report disappointed, with a drop of 2.5% in the last month, against the market’s expected 0.4% growth. 

For the next week on Monday, PMI figures are released for the UK, French, Germany, and the Eurozone.

EUR/GBP technical outlook

The EUR/GBP trades around 0.8576 in between the 100 and the 50-daily moving averages, while the 200-DMA stands at 0.8710. In the short term, the pair is in an uptrend. Strong resistance lies at the confluence of the 100-DMA and a psychological round level at 0.8600, whereas the July 20 high at 0.8669 is the second resistance, followed by 0.8700.  On the other hand, the first support is the 50-DMA at 0.8550, followed by the 0.8500 and then this year low at 0.8450.

RSI is at 60.61, supporting the bullish trend while the Average True Range is 36 flattish.