EUR/GBP on the top end for the week, 0.8580, the level to overcome

• The EUR has managed to climb up the charts against the GBP, but upside momentum remains limited.
• Eurozone data continues to miss expectations but hasn’t turned negative yet.
• Data-light GBP leaves the calendar open for the Euro.

The Euro (EUR) has managed to claw back some ground from the Pound Sterling (GBP) as of late, but the chart action has been middling for Thursday as the neighboring currencies play tug-of-war for chart momentum. It’s been a data-light week for the GBP, leaving the economic calendar decidedly Euro-centric for scheduled data events.

Gross Domestic Product (GDP) figures for the broader European Union (EU) came in slightly below expectations early Thursday, printing a meager 0.5%. Market forecasts expected the headline figure to match the previous period’s reported figure of 0.6%. The miss caused the Euro to sag briefly against the Pound Sterling, but a continued bump in German Bunds helped to bolster the EUR to a session high just beyond the 0.8600 handle before market sentiment dragged the EUR/GBP back towards the middle.

Upcoming on the economic data docket will be Germany’s Harmonized Index of Consumer Prices for August. The report is the Final version of the data point, with the Preliminary version released a week ago, so any wild deviations in the printing are not anticipated. The market forecast is for an annual rate of 6.4%, in line with the preliminary reading.

EUR/GBP Levels to watch 

On the technical side, the EUR/GBP has caught a bump to lift away from the week’s low of 0.8524, but the challenge for Euro bulls will be to overcome late August’s swing high near 0.8610. Continued selling pressure will put the EUR/GBP back into August’s lows near 0.8580, but near-term support is being provided by the recent inflection point around 0.8570.

EUR/GBP 1-hour chart