Piece written by Alexa Smith, Trive Financial Market Analyst 

The EURGBP currency pair ticked up after BRC retail sales reported a figure below the average growth rate due to high inflation. The British Retail Consortium (BRC) reported a 1.8% increase in retail sales compared to a 4.2% increase in the prior month, as consumer resilience is expected to diminish in the coming months due to high inflation and rising interest rates.   

The Sterling gained momentum against the Euro due to the aggressive interest rate hikes from the Bank of England (BoE) but has slightly waned since as macroeconomic factors began to weigh in. The UK is releasing a basket of economic data on Friday, which could tip the scales in its favour. Year-on-year GDP is expected to be 0.5%, contradicting the previous 0.4% decline, while Industrial Production is expected to increase from -2.3% to -1.1%. Will Britain be able to recover against an uneventful Europe, or will the economic data prove too much do the currency pair to handle? 

Técnicos 

Since bearish momentum failed to break down the 0.85544 support, the EURGBP currency pair ticked up, edging above the 50-day moving average. Upward momentum then bolstered the pair towards the 0.86375 resistance at the Golden Ratio, which poses a potential barrier towards upside opportunities as the currency pair trades within a range.  

A leg up from the 0.86058 support at the 38.20% Fibonacci level could encourage the price action to retest the 0.86375 resistance if a breakout from the 50% level is sustained. If the Golden Ratio fails to hold, upward momentum may be encouraged to retest the 0.86887 major resistance. However, a breakdown of the 0.86058 support could encourage a pullback towards the 0.85862 support at the 23.20% Fibonacci level, which may be pivotal for a reversal.  

Resumen 

The EURGBP currency pair is trading rangebound in anticipation of a hoist of economic data from the UK. The leg up from the 0.86058 support could drive upward momentum towards the 0.86375 resistance, which could pave the way towards the 0.86889 major resistance. However, strong economic data in the UK could tip the currency pair into a downward trend, marking the 0.85544 support as a pivot point towards further downside opportunities. 

Sources: TradingView, Reuters 

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