EUR/GBP stuck at 50-DMA

EUR/GBP cross is having a tough time maintaining the bid tone after having failed to hold above daily 50-MA yesterday.

Offered at 0.8495, Awaits UK trade data

The currency pair was offered at 0.8495 yesterday following which it moved back below daily 50-MA level of 0.8476. At the time of writing, the currency pair traded around 0.8465 levels.

Traders await UK trade data the trade deficit improved in July, courtesy of a sharp devaluation in Pound. However, ‘J curve’ theory says in the initial stages post devaluation, the country’s trade deficit worsens.

It remains to be seen how the numbers pan out. Apart from the UK trade data, focus would also be on German current account surplus, which according to prominent economists is a major problem not only for Eurozone but also for the global economy.

EUR/GBP Technical Levels

Acceptance above 50-DMA level of 0.8476 would open doors for 0.8565 (Aug 26 high) and 0.86 levels. On the lower side, breach of 5-DMA support of 0.8421 would shift risk in favor of a cut below 0.84 handle and a further drop to 0.8337 (Sep 6 low).