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17 Sep 2013
EUR/GBP moves nearly the 0.8400 after weaker UK CPI
FXstreet.com (Athens)- TheEUR/GBP was trading around 0.8377 before the UK CPI released at a slightly softer figure, but after the data loomed out it climbed very close to 0.8400 area (0.8395).
Will the EUR/GBP manage to break the resistance of 0.8400?
Many traders were awaiting for some inflationary pressures on behalf of UK, as it is widely known that inflation is often a sign of accelerating growth prospects and should be viewed as positive for the UK, especially after Carney linked monetary policy to both aspects of inflation and job growth. The data released did let down traders a bit, as inflationary pressures decreased slightly. With the ‘circuit breaker’ for forward guidance set at +2.5% on a yearly basis in the third quarter of 2015, sustained higher levels of inflation in the interim should keep Gilt yields supportive of a stronger sterling. It is noteworthy to point out, that the UK Home Prices Index exceeded pre-crisis level, hitting a record. Therefore, while the inflations showed that prices ease, the home prices released in up beating figures.
Technical Outllook on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the EUR/GBP “is under pressure, but should find some support circa 0.8350. Also, EUR/GBP again sold off sharply, which has somewhat negated our fears over a rebound. The market has started to erode its 55 week ma at .8374 and despite the TD perfected set up and 13 count clearly remains vulnerable on the downside. The intraday charts indicate that this move should terminate circa .8350. Any rebounds will find initial resistance offered by the June low at .8470, the 200 day ma at .8497 and stronger resistance at .8515, the 38.2% Fibonacci retracement of the recent decline. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012)
Will the EUR/GBP manage to break the resistance of 0.8400?
Many traders were awaiting for some inflationary pressures on behalf of UK, as it is widely known that inflation is often a sign of accelerating growth prospects and should be viewed as positive for the UK, especially after Carney linked monetary policy to both aspects of inflation and job growth. The data released did let down traders a bit, as inflationary pressures decreased slightly. With the ‘circuit breaker’ for forward guidance set at +2.5% on a yearly basis in the third quarter of 2015, sustained higher levels of inflation in the interim should keep Gilt yields supportive of a stronger sterling. It is noteworthy to point out, that the UK Home Prices Index exceeded pre-crisis level, hitting a record. Therefore, while the inflations showed that prices ease, the home prices released in up beating figures.
Technical Outllook on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the EUR/GBP “is under pressure, but should find some support circa 0.8350. Also, EUR/GBP again sold off sharply, which has somewhat negated our fears over a rebound. The market has started to erode its 55 week ma at .8374 and despite the TD perfected set up and 13 count clearly remains vulnerable on the downside. The intraday charts indicate that this move should terminate circa .8350. Any rebounds will find initial resistance offered by the June low at .8470, the 200 day ma at .8497 and stronger resistance at .8515, the 38.2% Fibonacci retracement of the recent decline. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012)