Two Trades To Watch: EUR/GBP, Gold - Wednesday, June 30

EUR/GBP tests 0.86 after UK GDP Q1 downward revision & ahead of Eurozone data. England may be going for Gold but that hasn't helped the precious metal which trades at 2 month lows ahead of ADP data.

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EUR/GBP tests 0.86 after downward revision to UK GDP Q1

The Euro failed to capitalize on stronger than expected consumer confidence data on Tuesday.

Eurozone economic sentiment surged to a 21 year high in June as the economy reopened. 

UK GDP Q1 final print came in at -1.6% quarter on quarter, down from -1.5% previously recorded. 

The UK government announced changes to the state aid program following Brexit. The aim is to make it easier and less bureaucratic for companies to access aid. 

UK covid cases are rising sharply but deaths remain low and the UK is still on track to reopen on 19th July, supporting the Pound 

Looking ahead a slew of Eurozone data is expected including German unemployment and Eurozone CPI (EZU). 

Where next for EUR/GBP? 

The EUR/GBP tests resistance at its month old trendline and 200 sma on the 4 hour chart at 0.86 which has capped gains in recent sessions. 

The MACD appears to be forming a bearish crossover providing hope to sellers that the pull back from 0.86 could continue towards 0.8585 the week old ascending trendline support.  

A break below this support could see the sellers test 0.8575 the 50 sma on the way to 0.8525 the June 24 low and 0.85 the round number. 

Any recovery would need to retake 0.86 round number, 200 sma and trendline resistance which could prove a tough nut to crack. A break here and above 0.8610 yesterday’s high, could open the door to 0.8630 June 15 high and 0.8665 the June high (FXE, FXB).  

England might be going for Gold but that hasn’t helped the precious metal 

Gold is falling lower for a third straight session. The precious metal trades 1.2% lower so far this week, thanks in part for the stronger US Dollar.  

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