TenkoFX - Analytics

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    EUR/GBP trading with a slight negative bias at 0.8560

    Despite of its swift recovery from sub-0.8500 level on Thursday, the EUR/GBP pair's upside remained capped at 0.8600 handle and the cross is again trading with a slight negative bias on Friday around 0.8555-65 band.On Thursday, the pair witnessed a profit taking move after its relentless rally of over 1000-pips from pre-Brexit lows and was supported by a bout of short-covering rally around the British Pound after the release of lower-than-expected contraction in UK manufacturing & industrial production data. The EUR/GBP cross, however, reversed on rising investors nervousness over the economic fallout for the UK economy after by the Brexit vote. Meanwhile, Friday's German trade balance data was mostly in-line with expectation and came in to show a surplus of €22.2B. The cross had a muted reaction to the data as markets now look forward to UK goods trade balance data that might provide some short-term momentum play in the EUR/GBP cross.Investors will also keep a close eye on US NFP data, later during NA trading session, which is likely to have diverging effect on the shared currency and the British Pound and could assist in deriving some near-term direction for the EUR/GBP cross.Technical levels to watchFrom current levels, the pair might continue to find immediate support near 0.8500 handle, which if broken decisively is likely to extend the near-term corrective move towards its next support near 0.8400 region. On the upside, 0.8600 level remains immediate strong hurdle to clear and a clear strength above this multi-year highs resistance now seems to open room further near-term appreciating move for the pair.


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