FxWirePro: EUR/GBP Daily Outlook

EUR/GBP chart - Trading View 

Fundamental Overview:

The British pound was buoyed after Q1 GDP data released earlier today confirmed a brighter outlook for UK economy.

UK Q1 GDP contracted -1.5%, marginally less than the -1.6% consensus helped by a stronger March GDP reading. UK economy expanded by 2.1% in March.

Adding to this, the UK Industrial/Manufacturing Production figures and Goods Trade Balance also came in better than consensus estimates.

Technical Analysis: Bias Bearish

- EUR/GBP is extending BoE-led losses, shows gradual grind lower

- Price action is below major moving averages, 5-DMA is biased lower

- Momentum studies are bearish, RSI is below 50 mark

- GMMA indicator shows near-term moving averages have crossed below long-term moving averages

- Volatility is rising as evidenced by widening Bollinger bands

Support levels - 0.8563 (cloud base), 0.85, 0.8415 (88.6% Fib)

Resistance levels - 0.8625 (5-DMA), 0.8640 (21-EMA), 0.8658 (55-EMA)

Summary: Stronger pound weighs on the pair, dragging it lower. Technical analysis also supports weakness. Cloud base offers immediate support. Breach below cloud will see test of 88.6% Fib at 0.8415.