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Forex: EUR/GBP trading negatively at 0.8641/42

The EUR/GBP fell nearly 40 pips off its session highs earlier today (0.8669) crashing through support and trading in the depths of 0.8627 (European lows), following the publication of weak German data. At the time of writing the cross is still entrenched in negative territory at 0.8641/42, incurring a loss of -0.17% ahead of the ECB Monthly Report at 9:00 GMT today.

According to the ICN.com Technical Analyst Team, “In examining the four-hour graph, we see the EUR/GBP trading above the linear regression indicators 34 and 55 – the pair is also above the Exponential Moving Average (EMA) 50 or the 0.8575 region. Collectively, all these technical events are considered positive and might cause the pair to rise and test levels above 0.8700. However, these positive expectations require prolonged stability above 0.8575.

Earlier today in Germany, Gross Domestic Product n.s.a. (YoY) came in at +0.1% in the fourth quarter, missing expectations of +0.2%. Meanwhile, Gross Domestic Product s.a. (QoQ) contracted -0.6% in the fourth quarter, exceeding estimates that called for only a -0.5% drop. Finally, the Gross Domestic Product s.a. (QoQ) has climbed +0.4% in the fourth quarter, relative to a figure of +0.9% previously.

Following a move past initial support at 0.8655, the ICN.com analysts points to additional means of support at 0.8615 onto 0.8600, and finally the pivotal 0.8575 level. Conversely, a prolonged push above the 0.8680 level will activate resistances at the 0.8700 barrier onto 0.8740.

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