EUR/GBP off session low, still weaker at 0.8630 after EU CPI
|The EUR/GBP cross had a muted reaction to the release of Euro-zone CPI print and maintained its offered tone following the release of Euro-zone CPI print.
Currently hovering around 0.8630 region, the cross initially dropped to 0.8610 level amid Deutsche Bank uncertainty, which has been weighing on the shared currency on Friday. Moreover, in absence of any positive surprise from the preliminary release of Euro-zone CPI print for September, the cross remained well offered, albeit has managed to recover few pips from session low.
The flash version of Euro-zone CPI print for September showed inflation ticking higher and came-in at 0.4% y-o-y, which was band in-line with consensus estimates. Meanwhile, core CPI, which excludes food, energy, alcohol, and tobacco items, fell short of consensus estimates pointing to 0.9% y-o-y rise and printed 0.8% for September.
Meanwhile, the British Pound's relative outperformance against its European counterpart could also be attributed to the upward revision of UK GDP growth and lower-than-expected rise in UK current account deficit for the second quarter of 2016.
Technical levels to watch
On a sustained weakness below 0.8610 immediate support, and a subsequent break below weekly lows support near 0.8590 level, the slide could get extended immediately towards 0.8570 level en-route the next major support near 0.8540 region.
Conversely, 0.8650-55 area might act as immediate resistance, which if cleared might assist the cross to break through 0.8675-80 resistance area and head towards reclaiming 0.8700 handle.
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