EUR/GBP tested the 0.95 resistance line and bounced back down. This came on the background of falling Industrial Production in Europe and stablization of the dollar selling.
EUR/GBP tried breaching the 0.95 resistance line, which was the high point in the end of December. The EUR/GBP reached a high of 0.9475 before retracting significantly back to 0.93.72 and then stabilizing over 0.94.
European Industrial Production fell by 3.5%. This was worse than last month’s drop of 2.7% (also revised downwards). Despite being slightly better than early expectations, that stood on -3.5%, this news took the Euro down. EUR/USD fell back to 1.3560 after reaching the peaks of 1.3730.
The dollar selling trend that began with the FOMC’s stunning announcement stopped. The dollar retracted against most currencies. Also the British Pound met strong resistance and weakened.
All in all, the Euro weakened more than the Pound due to the bad Industrial Production, so EUR/GBP went down, and erased the gains made earlier this week.
The resistance line that I’ve mentioned in previous posts, stood strong. It seems that EUR/GBP finished its move for this week. The 0.95 resistance line can be breached only next week.
After EUR/GBP broke the major downtrend resistance, its course is set upwards. I’ll continue following this interesting cross next week, and hopefully accompany it as it breaches this resistance line, on the road to parity.
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