The EUR/GBP has dropped and should resume the last two day’s drop, right now is trying to close the Monday’s gap. The Cable is strongly bullish on the short term, has increased significantly versus the greenback and versus the Yen. We’ll see what will happen because the price continues to move sideways, is approaching a strong static support, remains to see if will have enough directional energy to take out this level.
The pair goes down on the mixed Euro-zone and UK’s data, has erased today’s gains and looks determined to hit new lows till the end of the day.
The United Kingdom Prelim GDP increased by 0.3% in the Q1, failing to reach the 0.4% estimate, the BBA Mortgage Approvals dropped from 42.2K to 41.1K in March, has come in much below the 42.1K estimate, while the Index of Services rose by 0.5%, matching expectations. The Nationwide HPI dropped by 0.4%, even if the traders have expected to see a 0.1% growth, while the Gfk Consumer Confidence dropped from -6 to -7 points, matching expectations.
The Euro could drop further versus its rivals as the Euro-zone data have failed to impress today, the Spanish Flash GDP rose by 0.8% in Q1, beating the 0.7% estimate and the 0.7% growth in the previous reading period, while the German retail sales rose by 0.1%, matching expectations, has received support from the M3 Money Supply indicator, which has increased by 5.3%, more compared to the 4.7% estimate. The Euro -zone CPI Flash Estimate and the Core CPI Flash Estimate rose by 1.9%, respectively by 1.2%, beating the specialists estimates.
The European currency was punished by many economic reports, the French Flash GDP increased only by 0.3%, less compared to the 0.4% estimate, German Import Prices dropped by 0.5%, even if the traders have expected to see a 0.3% increase, French Consumer Spending has fallen as well, by 0.4%, everyone has expected to see a 0.6% growth while the French Prelim CPI increased by 0.1%, less versus the 0.2% estimate.

EURGBPdaily

The rate is still moving sideways between the 76.4% retracement level and the 100% Fibonacci level, has opened with a gap up on Monday, but now is likely to close this gap. Is somehow expected to drop further after the false breakout above the downside line of the former symmetrical triangle. Personally am waiting for a valid breakdown below the 76.5% retracement level and outside the ascending pitchfork's body. The perspective remains somehow bullish as long as the rate is trading above the lower median line (LML), a drop below this line, followed by a retest will bring us a good selling opportunity, with targets at the former Fibonacci levels. Could drop within the minor descending pitchfork, could be attracted by the median line (ml), but also by the lower median line (lml) in the upcoming weeks.

EURGBPh4

Could drop further after the failure to reach the sliding line (descending dotted line), personally I would like to see a retest of the upper median line (uml) before will drop further, a retest will confirm a further drop.

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