Sterling traction continues EURGBP to 08525
|EURGBP, Daily
German HICP confirmed at 1.7% y/y, as expected, with prices up 1.0% m/m. The sharp acceleration from just 0.7% y/y in November was mainly due to base effects from lower energy prices and the breakdown showed that prices for heating oil jumped 21.9% y/y in December, after still falling -6.7% y/y in the previous month. Petrol prices rose 6.0% y/y, after falling -2.2% y/y in December. Still, even excluding household energy and petrol, the annual rate jumped to 1.6% from 1.2% in November and the data will back the critics of Draghi’s expansionary policy in Germany. The Eurozone headline rate, remains lower, but has been conformed at 1.1% and is still trending higher – at least for now.
Across the English Channel, UK unemployment remained at the 11-year low of 4.8% in the official figure for November, as expected, while the December claimant count rate remained at 2.3%, although the claimant count fell 10.1k, more than the 5.0k decline expected. Total employment edged to a new record high in the three months to November. Average household incomes rose 2.8% y/y and 2.7% y/y in the respective with-bonus and ex-bonus figures for the three months to November, although the growth in real incomes are diminishing quickly with inflation rising.
The move down in EURGBP yesterday to below 0.8650 has triggered a SHORT position entry at 0.8675 this morning with Target 1 at the 14 DATR and 50 DMA 0.8525. Resistance to a move lower is the 20 DMA at 0.8591, and we could see a bigger retrace of yesterday’s large move down before the down move is resumed. Target 2 is the lower Bollinger band at 0.8402. Upside resistance is the 61.8 Fibonacci level of the October – December move down which held on both Monday and yesterday at the psychological 0.8800 area. The parabolic SAR turned negative yesterday, however, the RSI having been north of 70 dipped to 54 yesterday but remains positive and also MACD remains positive. The longer term Weekly and Monthly trends are also positive so this position is a against the longer term trend.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.