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Back on Gbp0.8600 Ahead of UK Inflation Data

EURGBP
MNI (London)
  • Recovery in the EUR outpaced GBP/USD's recovery through Tuesday's session which in turn allowed EUR/GBP to bounce off its Asian low of Gbp0.8582 to Gbp0.8619, meeting resistance at its key 10-dma.
  • The cross eased to Gbp0.8612 in early Asia before EUR demand picked up again, whilst GBP/USD was held below $1.4200, which saw EUR/GBP edge above its 10-dma (current Gbp0.8618) to Gbp0.8623.
  • UK Inflation data set to be released at 0600GMT (median 0.6%mm, 1.5%yy,; core 1.3%)
  • Resistance seen at the May17 high at Gbp0.8632, a break here to expose Gbp0.8650/65, with the top of the 1.0% 10-dma envelope moving into view at Gbp0.8704.
  • Support Gbp0.8612 ahead of Gbp0.8578 and the May12 low at Gbp0.8561.
  • MNI Techs: EURGBP is consolidating but remains bearish following fresh weekly lows last week and the print on May 12 of 0.8561. The move lower saw the cross move out of its recent range and confirm a bearish breakout. This suggests scope for a deeper pullback, potentially towards the key support at 0.8472, Apr 5 low. On the upside, the key resistance and bull trigger is unchanged at 0.8721, Apr 26 high. Initial resistance is at 0.8650, the 50-day EMA.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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