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Forex: EUR/GBP close to flat after UK GDP

Today's upside found its high early in London morning, at 0.8673, and a retracement of gains was already in process just before the release of EMU money supply data. EMU M3 money supply eased from 3.7% to 3.5% (3m) in January, but rose from 3.3% to 3.5% (consensus of 3.2%) in the annualized basis. Private loans contracted -0.9%, more than the -0.6% expected.

The EUR/GBP went back to the opening price to wait for UK GDP. Annualized growth came in at +0.3%, instead of the 0.0% expected, and the quarterly figure came in at -0.3% as forecasted. Total Business Investment contracted -1.2% (QoQ), easing from 5.4% to 0.4% (YoY).

“The bearish engulfing pattern and break of the uptrend suggests further weakness will be seen to 0.8566 then 0.8449/47, the 50% retracement of the move seen this year and the 8th February low”, wrote Commerzbank analyst Karen Jones, pointing to interim resistance at 0.8715.

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