EUR/GBP resumes its uptrend and approaches 0.8700
- The Euro fails at 0.8690, the 61,8% Fib. retracement of the late November decline.
- UK economy contracted in the third quarter, against expectations.
- UK retail sales bounce up unexpectedly and ease negative pressure on the Pound.
The Euro bounced up sharply on Tuesday to retrace earlier losses resuming its uptrend from early December lows and erasing most of the losses of the late-November sell-off.
The euro seems to be faring better on the risk-on sentiment, with markets celebrating the end of t the prospects of rate cuts next year, which are expected to contribute to avoiding a deep recession next year.
The Eurozone and UK economic docket is empty this week, with market sentiment expected to drive both currencies higher against the US Dollar. This might lead to volatile movements in the pair.
The technical picture remains positive, as confirmed by Tuesday´s bullish engulfing candle, which has increased bulls’ confidence to break previous highs, at 0.8685, aiming to 0.8705 and 0.8725.
On the downside, immediate support is at 0.8665 and below here, 0.8645.
Technical levels to watch