- EUR / GBP remains confined to a sideways range, not far from recent lows.
- United Kingdom: economy contracted 2.9% in January.
- Eurozone: Industrial production improves more than expected in January.
The EUR / GBP is rising modestly on Friday and is trading at the day’s high at 0.8580. It is testing the upper limit of a lateral range, effective Tuesday. Consolidation remains dominant, in a context of long-term downtrend.
Neither the meeting on Thursday European Central Bank (ECB), nor the data released on Friday, generated enough noise to make the consolidation channel look broken.
In the United Kingdom, it was known that the economy contracted 2.9% in January, due to the new restrictions on activities. However, the data was better than expected, which was due to a reduction of 4.9%. Industrial production fell 1.5% in January (consensus: -0.6%). In the Eurozone, industrial production surprised positively. It increased 0.8% in January (consensus: + 0.2%) and also the December figures were revised upwards.
Regarding the coronavirus, the advance of the new strain in the United Kingdom generates fear, although the differential continues to favor the pound. While the vaccination process in Great Britain is making steady progress, complications are emerging in the Eurozone. In turn, the third wave of infections would be starting in Germany.
Differences regarding the impact of the coronavirus have been behind the recent appreciation of the libra on the market, as the UK is expected to return to normal before its neighbors.
Technical levels
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