The heavy calendar of risk events and data releases is still ready for this week, but we believe the responsibility is now in EUR to increase on its own merits. We would be more concerned if EURGBP could not stay above 0.8500 at the end of this week. Traders may need to see what CPI and retail data say, and job data is reproduced before pursuing a move in EURGBP.
The beaten cross is above 0.8550 on a daily closing basis. Well, so far, the cross traced a double bottom pattern like EURUSD and EURJPY. How far it can be kept is the main concern in light of the macro data points that will have to come this week.
Except in April 2021, the cross has been painted red since last October. It means nine months and ten, the price ended lower, except in August. Last week the cross fell briefly to 0.8450, but managed to close at 0.8500.
Technical operators maintain strict control between the levels of 0.8500-0.8400. A breakdown and closing below means we are sliding towards the 0.8300-0.8275 range.
UK gross domestic product is estimated to have risen 4.8% in the 2nd quarter (April-June) 2021, according to the latest ONS data. The latest growth was driven in large part by a sharp rise in consumer spending, as Covid-19 restrictions gradually lifted. Most of the rapid increase in GDP is due to service production which increased by 5.8% in Q2, while production growth was much weaker at 0.5%.
If we look at the number of real GDP in the second quarter, compared to the United States, the United Kingdom experienced the largest increase in real GDP.
Commenting on the Q2 issue, the Deputy Director of Macroeconomic Policies of Dr. Hande Küçük said: “GDP increased by 4.8% in the second quarter of 2021, in line with our monitoring of GDP a month ago.”
Looking ahead to T3, the current boom is slow, according to the NIESR report.
We may see some of the long positions just built in the CFTC’s next positioning report, as the bullish sentiment of the pound eased last week and the EUR / GBP once again exceeded the level of 0, 8500. This week, we see margin for EUR / GBP to re-include a downward trend to 0.8500, according to ING.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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