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EUR/GBP drops to lows near 0.7860 on EMU CPI

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 29, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The selling pressure surrounding the EUR/GBP cross intensified following the release of softer Euro zone inflation numbers.

    EUR/GBP losing sight of 0.79 handle

    Currently, the EUR/GBP pair drops -0.20% to 0.7864, hovering close to fresh session lows of 0.7859. The EUR/GBP cross ran through fresh sellers after the common currency dipped sharply as the Euro zone CPI print disappointed markets and fanned expectations of further 10bps ECB depo rate cut at its March 10 meeting.

    EZ CPI fell 0.2% y/y in Feb, down from the 0.4% growth seen in January. While market predicted a 0.1% uptick. Meanwhile, the core figures rose 0.7% y/y in Feb, down from the 1.0% rise seen in January.

    While the cable keeps losses, although retreated from daily lows and contributed to the downside pressure on the EUR/GBP cross. Markets preferred to brush away upbeat mortgage approvals data from the UK as the focus now remains on the US housing data for further momentum.

    EUR/GBP Technical Levels

    To the upside, the next resistance is located at 0.7880/86 (1h 20-SMA/ 5-DMA), above which it could extend gains to 0.7925/27 (Feb 26 & 24 High). To the downside immediate support might be located at 0.7832 (1h 200-SMA) below that at 0.7800 (20-DMA).
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