EUR/GBP muted around 0.8855 post-UK data
• UK manufacturing production grew 0.7% m-o-m.
• UK visible goods trade deficit fell more than expected.
• Lack of progress on Brexit talks negates mostly positive data.
The EUR/GBP cross extended its retracement from 0.8875 level and refreshed session lows post-UK macro data, albeit quickly rebounded few pips thereafter.
The cross ran through some fresh offers and retreated back below mid-0.8800s after data released from the UK showed manufacturing production came in to show a strong m-o-m growth of 0.7% for September. The total industrial production data also bettered expectations and show a 0.7% m-o-m rise during the reported period, up from 0.3% gain (revised higher) recorded previously.
• UK manufacturing production rises sharply in Sept, a big beat on expectations
Separately, the UK visible goods trade deficit fell more than expected to £11.253 billion in Sept as compared to £-12.80 billion expected and last month’s £-14.245 billion. Meanwhile, the UK construction output is contracted sharply and dropped -1.6% vs -0.6% fall expected.
Today's mostly upbeat UK releases failed to provide any meaningful boost to the British Pound, with the cross returning back to the pre-data level amid prolonged concerns over the lack of progress on Brexit talks.
• EUR/GBP risks points to the upside – Danske Bank
Technical levels to watch
Bulls would be eyeing for a follow through up-move beyond 0.8875 level, above which the cross is likely to aim towards reclaiming the 0.8900 handle before darting towards 0.8935-40 supply zone.
On the flip side, 0.8845-40 area is likely to protect the immediate downside, which if broken could accelerate the fall back towards the 0.8800 handle.