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The Euro fails at 0.8690, the 61,8% Fib. retracement of the late November decline.
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UK economy contracted in the third quarter, against expectations.
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UK retail sales bounce up unexpectedly and ease negative pressure on the Pound.
The Euro rally from early – December lows has been capped at the 0,8690 resistance area, and the pair is losing ground on Friday´s European session, returning to the mid-range of 0.8600.
The Pound remains steady despite mixed UK data
Data from the UK released earlier today showed GDP contracted in the third quarter, following a flat reading against earlier estimates and a 0.2% advance in the second quarter.
On the positive side, retail sales rose 0.1%, ending a more than one-year decline, against market consensus of a 1.3% drop. These figures offset the negative impact of downward GDP revisions, reducing bearish pressure on the pound.
In Europe, the Italians and French posted better-than-expected readings, while Spanish GDP confirmed 0.3% growth in the third quarter and a 1.8% year-on-year advance. However, the impact of these figures on the euro has been minimal.
The technical picture shows the pair pulling back from the 61.8% Fibonacci retracement of the late November sell-off at 0.8690. While the pair retains its broad positive trend, it is a common target for corrective action.
Support levels are at the previous high of 0.8645, which closes the way towards 0.8600, and at the December 11 low of 0.8550. Resistance is the aforementioned 0.8690 and 0.8725.
