EUR/GBP directionless around 0.8570, focus on data, UK elections

EUR/GBP hovers around the 0.8570 region.
UK CPI contracted 0.2% MoM and rose 1.5% YoY.
EMU Industrial Production expanded 0.1% MoM.

EUR/GBP is alternating gains with losses below the 0.8600 handle on Wednesday on the back of the lack of clear direction in both the quid and the shared currency.

EUR/GBP supported near 0.8550

The European cross is looking to extend the sideline theme in the lower end of the recent range in the 0.8570 area, just above 6-month lows in the boundaries of 0.8550.

Back to the UK election campaign, the UK’s health system has taken centre stage in past hours after a YouGov poll noted that 53% of voters would accept a higher income tax rate to support extra spending in the NHS. In this regard, Labour is favouring a 4.3% annual increase vs. a 3.4% from Tories.

Data wise today, some light at the end of the tunnel appears to await for the Industrial Production in the euro area after it expanded at a monthly 0.1% during September and contracted 1.7% from a year earlier. Both prints surpassed initial estimates.

In the UK, inflation figures tracked by the headline CPI surprised to the downside and dropped to 3-year lows after contracting 0.2% inter-month in October and rising at an annualized 1.5%. The sterling, in the meantime, is facing extra pressure on the data side following today’s lower-than-expected results and Tuesday’s weakness (deceleration?) in the labour market.

EUR/GBP key levels

The cross is advancing 0.06% at 0.8575 and faces the next hurdle at 0.8615 (21-day SMA) seconded by 0.8667 (78.6% Fibo of the May-August rally) and then (0.8676 (high Oct.24). On the flip side, a breach of 0.8557 (monthly low Nov.11) would expose 0.8488 (monthly low May 6) and finally 0.8474 (2019 low Mar.12).

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