EUR / GBP bounces after falling to lows since February 2020

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  • The pound advances after inflation data from the United Kingdom.
  • Inflation in the Eurozone also reaches its highest in more than a decade.
  • EUR / GBP downhill but still defending 0.8400.

EUR / GBP is trading stable around 0.8415 / 20, after experiencing high volatility hours ago. The cross fell as low as 0.8389, following data from the United Kingdom, reaching the lowest level since February 2020.

The euro managed to reverse part of the losses in the last hour, and recovered the important support level of 0.8400, easing the downward pressure. The trend still points south, but if it manages to overcome 0.8430, the euro could form support. A return below 0.8400 on the other hand, would leave the pound ready for more gains.

Inflation data in focus

At United Kingdom, October’s inflation figures were higher than expected, rising to 4.2%, the highest in a decade. This raised expectations of an interest rate hike by the Bank of England at the December meeting and boosted the pound on all fronts.

In the Eurozone, the final inflation reading was not surprising. The annual rate of the CPI reached 4.1%, the highest in 13 years. From the European Central Bank there are no signs of imminent actions given the acceleration in the rise in prices, as there is from the BoE. That divergence largely explains why EUR / GBP is trading at its lowest levels in months.

Technical levels

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