- The pound registered an advance on almost all fronts, the best of the European session.
- EUR / GBP could weaken the technical outlook to close below 0.8860.
He EUR / GBP fell below a key support zone, which is the 0.8860 area, which contained casualties several times in the second half of last year. The price fell to 0.8834, the lowest level since May 2020. The cross is trading at 0.8855.
A daily EUR / GBP close below 0.8860 would point to further weakness. At 0.8830 is the 20-week moving average, which may offer resistance. Then 0.8800 appears. In the event of a rebound with a return clearly above 0.8860, then the euro could be positioned for a higher rise, especially if it advances beyond 0.8920.
The pound was reinforced by the momentum brought by the vaccination process in the United Kingdom, due to the inflation data for December, which were higher than expected. Then also added technical factors, such as the break of the EUR / GBP below 0.8860.
The UK consumer price index rose 0.6% in December from a year ago, higher than the 0.3% in November and the 0.5% expected. Despite the rise, the index remains below the Bank of England’s target (for the 17th consecutive month).
In the Eurozone, the CPI contracted 0.3% in December compared to a year ago, and the underlying price advanced 0.2%. The data was in line with expectations and did not generate any impact.
Technical levels
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