Eurgbp Turns Lower

 Eurgbp Turns Lower

Eur/Gbp Turns Lower Towards 0.8610 After Weak Retail Sales Data

The EUR/GBP has turned course and lost its recent gains. As a result, the pair can be seen trading near the 0.8610 handle with a downward bias. The weak retail sales data from Germany drive the recent weakness in the EURO/GBP.

Considering the size of Germany's economy & and its role in the EU, it makes sense for the EUR to get on the back foot against the GBP.

Retail Sales Down By 2.4%

closer look at the data shows a 2.4% change in Germany's retail sales on a Y/Y basis. The market was looking for a number around 0.5% only. In addition, the retail sales data from last month showed a decline of 0.1%.

The monthly sales data, an important metric, showed a 2.5% decline against a forecast of 0.1%. Looking ahead, the HICP will be closely watched by the EUR/GBP traders. As per the forecast, the inflation data from the EU will likely jump, just like it happened in Germany.

Given the recent data from Germany & and other EU countries, the prospects of rate cuts are much lower than they were a few days ago.

Looking at the GBP's side shows that the currency benefits from the UK's housing & and credit data. Another piece of GBP-positive data is consumer credit, which touched a reading of 2.005 billion in November. In addition, the house prices (Halifax) showed a 1.1% jump in December from a previous reading of 0.6%.

For now, the GBP has the upper hand, but we need to understand that the UK's economic outlook is gloomy at best. Many UK firms have requested that the UK's central bank introduce rate cuts. They have cited the change in monetary policy because of the weak economy.

The technical outlook of GBP/USD shows that the 20 SMA is at the strategic level of 0.864. 50 SMA follows this at 0.8664, and 100 SMA near 0.8646.

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