EUR/GBP bears taking control in turnaround markets, testing key trendline support
|- EUR/GBP breaking down the doors of the supporting trendline.
- EUR/GBP 0.8920 capped, 0.8880 needs to hold.
EUR/GBP has given back some ground in a choppy bid in the cross from the recent lows of 0.8777 (Feb 9.) to recent Valentine's Day 0.8919 highs.
Currently, EUR/GBP is trading at 0.8890, down -0.09% on the day, having posted a daily high at 0.8922 and low at 0.8887.
US data response, retails sales and CPI - Capital Economics
EUR/GBP has been driven by flows in cable that has rallied up through the 200-hr SMA at 1.3934 and has reached a recent high of 1.3965 on the back of a sell-off in the greenback, DXY -0.18% that is currently trading at 89.53 within a range of between 89.378 - 90.124 for the day so far.
UK inflation in line with expectations but careful with doldrums risk
89.80 support gave out despite the CPI beat. (The VIX dropped below 20 after a high of 25.72 allowing for a bounce in stocks post-CPI data decline and weakness in the greenback).
Price action overnight and levels
Meanwhile, we had a data dump of a session overnight in European numbers where the euro was -0.03% on the session and where EUR/GBP rose to a five-week high of 0.8920 during the same session. (0.8910 was Tuesday's high. 0.8927 marks the 2018 high (Jan 12))EZ Q4 GDP matched the forecast of 0.6% qq and 2.7% yy while EZ IP came in at 5.2% yy and beat the 4.2% forecast.
EUR/GBP levels
On a break of 0.8880 trendline support, bears will have 0.8770 ahead of the December and January lows at 0.8689/87 on their map. Should the trend line hold and price correct back into the ascending channel in a northerly trajectory, the top of a shallow channel at 0.8962 through 0.8936 January high and the 0.9034 October 2017 high ahead of 0.9071/0.9175 61.8% and 78.6% Fibonacci retracements.
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