15 Oct 2013
EUR/GBP retreats on solid UK CPI data
FXstreet.com (Athens) – The EUR/GBP is briefly trading downwards as the UK CPI released at (+2.7% ) versus (+2.6%) expected.
EUR/GBP under pressure, on encouraging UK CPI, House Price Index
The EUR/GBP was hovering around 0.8488 area before the UK data released, but soon moved sharply downwards on the 0.8467 area, as the data showed that inflation pressures remain sticky in the UK, while the UK home prices hit their highest record level on August. Elaborating on, the CPI released unchanged both on aspects of yearly and monthly data – despite a 0.1% fall had been penciled in both data – while the UK home prices were announced not just at very solid levels, but precisely at the highest levels ever seen (surpassed by far the levels seen before the financial crisis in 2008).
Technical Outlook on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/GBP’s correction higher is being capped by the 55- and 200-day moving averages at .8498/.8527. Within this resistance zone the mid-August lows can also be seen. This area should act as tough resistance and we maintain our bearish bias while capped by .8527 on a daily chart closing basis. Failure here will leave focus once more on the .8332 September low. Longer term the market has reversed from the top of a four year channel and longer term downside targets of .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012).”
EUR/GBP under pressure, on encouraging UK CPI, House Price Index
The EUR/GBP was hovering around 0.8488 area before the UK data released, but soon moved sharply downwards on the 0.8467 area, as the data showed that inflation pressures remain sticky in the UK, while the UK home prices hit their highest record level on August. Elaborating on, the CPI released unchanged both on aspects of yearly and monthly data – despite a 0.1% fall had been penciled in both data – while the UK home prices were announced not just at very solid levels, but precisely at the highest levels ever seen (surpassed by far the levels seen before the financial crisis in 2008).
Technical Outlook on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/GBP’s correction higher is being capped by the 55- and 200-day moving averages at .8498/.8527. Within this resistance zone the mid-August lows can also be seen. This area should act as tough resistance and we maintain our bearish bias while capped by .8527 on a daily chart closing basis. Failure here will leave focus once more on the .8332 September low. Longer term the market has reversed from the top of a four year channel and longer term downside targets of .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012).”