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EUR/GBP tests lower triangle levels after UK GDP slowdown
UK GDP growth slowed to 0.4% quarter-on-quarter in Q2, and EUR/GBP is trading below the triangle’s lower boundary near 0.8553.
EUR/GBP is trading beneath its symmetrical triangle support after the pair broke below the formation’s lower boundary earlier this month, with price now sitting under the lower market profile level around 0.8553 and testing it from below, according to Action Forex.
In the background, UK economic growth slowed: the UK Office for National Statistics reported GDP growth eased to 0.4% quarter-on-quarter in the second quarter from 0.6% in the first quarter on 13 August. Action Forex said the reading was in line with expectations and the market reaction was relatively muted.
Action Forex also pointed to a largely steady interest-rate backdrop, noting the Bank of England kept its policy rate at 3.75% on 30 July and the ECB left its rate at 2.25% on 23 July. With those decisions largely priced in, the outlet said short-term EUR/GBP movement may be driven more by technical factors than by fresh macro data.
Technically, Action Forex said a successful retest could make the green support level near 0.8533 more important, while a false breakout would refocus attention on the upside resistance area. It cited multiple reference levels above, including a point of control near 0.8564, the profile’s upper boundary around 0.8580, and resistance near 0.8586, with RSI and moving averages indicating momentum is currently inconclusive.