There was some resistance experienced by #EURGBP @ 0.85671 after a robust UK CPI report was released.
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- EUR/GBP meets with some supply following the release of a stronger UK CPI report.
The pair currently trades last at 0.85671.
The previous day high was 0.8581 while the previous day low was 0.8527. The daily 38.2% Fib levels comes at 0.856, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8548, expected to provide support.
The EUR/GBP cross comes under some selling pressure following the release of the latest UK consumer inflation figures on Wednesday and drops to a fresh daily low during the early European session. Spot prices, however, manage to recover a few pips in the last hour and currently trade with only modest intraday losses, around mid-0.8500s.
The UK Office for National Statistics (ONS) reported that the headline UK CPI increased by 0.7% in May and the yearly rate held steady at 8.7% as compared to consensus estimates for a modest fall to 8.4%. Furthermore, core inflation, which excludes volatile energy, food, alcohol and tobacco prices, accelerated from 6.8% in April to the 7.1% YoY pace during the reported month, or the highest rate since March 1992. This, in turn, reaffirms market bets for a further policy tightening by the Bank of England (BoE), which, in turn, provides a goodish lift to the British Pound and exerts some downward pressure on the EUR/GBP cross.
In fact, the markets are now pricing in a greater chance of a jumbo 50 bps BoE rate hike on Thursday. Moreover, sticky inflation and a persistently tight labor market have forced investors to increase their forecast for peak interest rates to 6.01% by February 2024. The immediate market reaction, however, remains limited as traders now seem reluctant to place aggressive bets and prefer to move to the sidelines heading into the key central bank event risk. Apart from this, a modest US Dollar (USD) strength caps the Sterling, which, along with the European Central Bank’s (ECB) hawkish outlook, limits losses for the EUR/GBP cross.
It is worth recalling that the ECB hiked interest rates for the eighth straight time last Wednesday, by 25 bps to 3.5% or the highest in 22 years and signalled that additional rate hikes will be needed to bring Eurozone inflation to its medium-term target of 2%. In the accompanying policy statement, the ECB raised its inflation projection for this year to 5.1% from 4.6%, suggesting that the central bank is still not done with its policy tightening, which, in turn, is seen lending some support to the shared currency. That said, the aforementioned fundamental backdrop supports prospects for a further depreciating move for the EUR/GBP cross.
Technical Levels: Supports and Resistances
EURGBP currently trading at 0.8554 at the time of writing. Pair opened at 0.8554 and is trading with a change of 0.0 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 0.8554 |
| 1 | Today Daily Change | 0.0000 |
| 2 | Today Daily Change % | 0.0000 |
| 3 | Today daily open | 0.8554 |
The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.8602, 50 SMA 0.87, 100 SMA @ 0.8765 and 200 SMA @ 0.8752.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 0.8602 |
| 1 | Daily SMA50 | 0.8700 |
| 2 | Daily SMA100 | 0.8765 |
| 3 | Daily SMA200 | 0.8752 |
The previous day high was 0.8581 while the previous day low was 0.8527. The daily 38.2% Fib levels comes at 0.856, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8548, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 0.8527, 0.85, 0.8473
- Pivot resistance is noted at 0.8581, 0.8608, 0.8635
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 0.8581 |
| Previous Daily Low | 0.8527 |
| Previous Weekly High | 0.8613 |
| Previous Weekly Low | 0.8522 |
| Previous Monthly High | 0.8835 |
| Previous Monthly Low | 0.8583 |
| Daily Fibonacci 38.2% | 0.8560 |
| Daily Fibonacci 61.8% | 0.8548 |
| Daily Pivot Point S1 | 0.8527 |
| Daily Pivot Point S2 | 0.8500 |
| Daily Pivot Point S3 | 0.8473 |
| Daily Pivot Point R1 | 0.8581 |
| Daily Pivot Point R2 | 0.8608 |
| Daily Pivot Point R3 | 0.8635 |
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