Global macro overview for 13/10/2016:
The industrial production data from the eurozone surprised market participants yesterday by revealing better than expected figures. After last month decline of -0.7%, market participants expected a slight increase of 1.4%, but the reading released was at the level of 1.6% (annual advance was 1.8%). Although, the solid recovery demonstrated German production for August with output rising 2.5% on a monthly pace, while new orders also strengthened and there was a robust recovery in exports. Nevertheless, this good jump in industrial production data is very unlikely to decrease the amount of concern regarding the future of the eurozone's economy without the United Kingdom.
Let's now take a look at the EUR/GBP technical picture in the daily time frame. The flash-crash high at the level of 0.9268 is currently the most important resistance level for bulls as so far it does not look the market wants to go down any time soon. The visible bearish divergence between the price and momentum oscillator might be good enough for a healthy correction, but as long as the golden trend line support is not clearly violated the outlook remains bullish.
