Bears in the Power, how far it can go?
Today, we had a flood of British economic data. GDP figures for Q4 2021 witnessed a 6.5% YoY jump, more than 6.4% YoY expected. However, on the monthly scale, GDP decreased by -0.2%. In the quarterly figure of 1.1% expectations and initial estimates also, we had no change. On the other hand, we had Industrial and Manufacturing production as well. According to the published data, both were better than expectations respectively by 0.3% and 0.2%.
In the EU data, we had German Inflation numbers, and all actual numbers were in line with estimates. Consumer inflation in Germany in annual and Monthly Scale, respectively seen at 4.9% and 0.4%, as they were expected. Therefore, from the fundamental point of view, we can see Euro in a bit better and stronger position, while the British pound moves in a weaker position. The weakness in the UK's economic recovery was expected, as I mentioned in the 2022 Global Outlook. On the EU front, the market started to price on an earlier rate hike from ECB. Therefore we can see the Euro have a bit stronger position and more demand, as stability in the Eurozone economic growth rate is more logical than British.
From the technical point of view, as you can see in the bellow figure, the Market volume moves under 20 DAM, and it is usually read as a bearish signal. In the chart also we can see that 0.8422 is the key resistance, and trading under this level can put the bears in a stronger position. On the flip side, any uptrend needs to breathe above 0.8532.
