EUR/GBP meets support near the 0.8900 handle post-CPI

EUR/GBP fades the spike to the 0.8975/80 band on Tuesday.
EUR weakness forced the cross to give away part of recent gains.
UK CPI rose 2.0% on a year to May, matching estimates.

Pablo Piovano FXStreet

The now better tone in the Sterling is forcing EUR/GBP to leave the area of daily highs and re-focus on the downside around the 0.8900 handle.

EUR/GBP weaker post-UK CPI

The European cross is struggling for direction on Wednesday following UK inflation figures for the month of May.

In fact, headline consumer prices rose at a monthly 0.2% and 2.0% over the last twelve months, in line with previous estimates. Further data saw the CPIH (prices including housing costs) rising 1.9% from a year earlier.

Tuesday’s sell-off in the single currency following the dovish tone from President Draghi at the ECB Forum in Sintra have motivated the cross to recede from fresh 5-month peaks in the vicinity of 0.8980.

From the UK political arena and following another vote to decide the leader of the Conservative Party and Theresa May’s successor, Dominic Raab was knocked out yesterday, while Boris Johnson came once again first of the ballot with 126 votes (from 114 votes).

Later in the week, the Bank of England is expected to leave the refi rate and its monetary policy stance unchanged at tomorrow’s meeting.

What to look for around GBP

Heightened uncertainty around the Brexit negotiations and May’s successor keeps the pressure on the Sterling intact for the time being. In the UK economy, the broader softness in fundamentals remains the name of the game, while inflation figures appear to be losing some traction. Additionally, the current steady stance from the Bank of England appears justified by below-target inflation figures, downbeat results from key economic fundamentals and somewhat slowing momentum in wage inflation pressures, all adding to speculations of a ‘no-hike’ this year despite some calls signalling a potential hike in November.

EUR/GBP key levels

The cross is retreating 0.06% at 0.8907 facing the next support at 0.8871 (low Jun.12) followed by 0.8867 (21-day SMA) and then 0.8826 (low Jun.5). On the other hand, a break above 0.8974 (monthly high Jun.17) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD challenges 1.1800, two-week lows

EUR/USD remains on the defensive, extending its leg lower to the vicinity of the 1.1800 region, or two-week lows, on Tuesday. The move lower comes as the US Dollar gathers further traction ahead of key US data releases, inclusing the FOMC Minutes, on Wednesday.

GBP/USD looks weaker near 1.3500

GBP/USD adds to Monday’s pessimism and puts the 1.3500 support to the test on Tuesday. Cable’s marked pullback comes in response to extra gains in the Greenback while disappointing UK jobs data also collaborate with the offered bias around the British Pound.

Gold loses further momentum, approaches $4,800

Gold recedes to fresh two-week troughs around the $4,800 region per troy ounce on Tuesday. The precious metal builds on Monday’s downtick following a marked rebound in the US Dollar and mixed US Treasury yields across the board.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.