The UK data

The news block on the UK was very positive, given the less rapid slowdown in the manufacturing industry in the UK and the reduction in the negative trade balance, see the news feed for more information about the news. The main indicator that remains apprehensive is the trade balance, which, despite the deficit reduction, maintains a downward trend.

Based on the latest events, Brexit negotiations and the trade balance indicators, which point to the UK’s significant dependence on the EU, fears over the pound may resume. Especially acute reaction of the market may be caused by the expectations relative to the new trade relations between the kingdom and the euro area.

As a result, the pair EUR/GBP is trading near the June’s low  based on the optimism on the pound, but further strengthening of the British remains limited to its overbought. Therefore, one should expect the formation of a lateral trend. The reason for unidirectional movements may be new data on Brexit. Support levels: 0.8690 and 0.8650, resistance: 0.8740 and 0.8760.

Fig. EUR/GBP. Current price – 0.8700

Hanzenko Anton