US: Americans "Suddenly" Likely To See The Economy Getting Worse

• RES 4: 0.8797 High Dec 17   
• RES 3: 0.8769 61.8% retracement of the Nov 14 - Feb 4 bear leg 
• RES 2: 0.8746 High Jan 21 and a key resistance
• RES 1: 0.8730 100-dma
• PRICE: 0.8697 @ 17:05 GMT Feb 16
• SUP 1: 0.8688/8613 20-day EMA / Low Feb 04 and bear trigger
• SUP 2: 0.8597 Low Aug 14
• SUP 3: 0.8578 Low Jul 2 ‘25 
• SUP 4: 0.8544 50.0% retracement of the Dec ‘24 - Nov ‘25 bull cycle

EURGBP is in consolidation mode and is trading closer to its recent highs. The latest recovery still appears corrective, however, a key short-term resistance at 0.8746, the Jan 21 high, remains exposed. A clear break of this level would highlight a potential trend reversal. MA studies are in a bear-mode position and highlighting a dominant downtrend. A resumption of weakness would refocus attention on 0.8613, the Feb 4 low and bear trigger.       

Eurozone industrial production slumped in December as national-level data had suggested some time ago, with its largest monthly decline since Apr 2025 and before that Jan 2024. Previous strength still saw a reasonable quarter for IP growth in Q4 compared to declines in Q2 and Q3 but with momentum clearly weak heading into 1Q26. 

• Eurozone industrial production confirmed a large contraction in December after national-level details released in previous weeks, with -1.4% M/M (cons -1.5) after an also sizeable downward revision to 0.3% M/M (0.7 initially reported) in November.
• Declines were led by a swing lower in capital goods (-1.9% M/M after 2.6%) whilst there was particularly tepid recovery from various categories that had seen sizeable declines back in November. In particular energy saw -0.3% after -2.2%, durable consumer goods 0.2% after -1.8% and non-durable consumer goods -0.3% after -2.0%.
• By country, the main culprit was Germany where production tumbled -2.9% M/M on the ex-construction basis reported by Eurostat. Recall that Destatis back on Feb 6 had reported a large miss of -1.9% (then consensus of -0.3) despite a 3% rise in construction, along with a downward revised 0.2% (initial 0.8) in Nov.  
• It was closely followed by Spain with -2.6% M/M, having on Feb 6 shown an also surprisingly negative -2.5% M/M (then consensus of -0.5) with only a small upward revision to 1.1% (initial 1.0%).
• France also confirmed the -0.7% M/M reported on Feb 5 (then consensus of 0.2) and its upward revision to 0.1% (initial -0.1%).
• Rounding out the other largest member states, Italy saw -0.4% after 1.5% M/M whilst Netherlands increased 0.7% after -0.9%, the only of the largest five Eurozone countries to increase in December.
• Back to Eurozone-wide trends, the latest 3M/3M of 0.5% non-annualised in Q4 at least compares favourably with -0.1% in Q3 and -0.3% in Q2, but with clearly weak momentum heading into 2026.
• The Y/Y growth rate, also calculated from seasonally and working day adjusted data, eased to 1.3% Y/Y from 2.4% (initial 2.7%) for its softest since August. 

• RES 4: 1.3889 1.00 proj of the Nov 4 - Jan 6 - Jan 19 price swing     
• RES 3: 1.3868 High Jan 27 and the bull trigger
• RES 2: 1.3733/3814 High Feb 4 / high Jan 30  
• RES 1: 1.3712 High Feb 11
• PRICE: 1.3628 @ 17:04 GMT Feb 16
• SUP 1: 1.3587 Low Feb 9
• SUP 2: 1.3527/09 50-day EMA / Low Feb 6
• SUP 3: 1.3458 76.4% retracement of the Jan 19 - 27 upleg 
• SUP 4: 1.3402 Low Jan 22  

A bullish theme in GBPUSD remains intact - for now. The recovery from the Feb 6 low highlights a short-term reversal and signals the end of the corrective phase between Jan 27 - Feb 6. Note that MA studies continue to highlight a dominant uptrend. The next resistance to watch is 1.3733, the Feb 4 high. Clearance of this level would expose 1.3868, the Jan 27 high and a bull trigger. Key S/T support lies at the 50-day EMA, at 1.3527.