EUR/GBP recovers 0.8400 and moves into positive positive territory

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  • EUR/GBP rebounds from lows near 0.8380.
  • United Kingdom: annual inflation reaches 10.1% in July.
  • Advanced GDP reading for the second quarter of the Eurozone increased 3.9% year-on-year.

After a decline towards the nearby 0.8380, the EUR/GBP recovered and in the last hour accelerated to the upside reaching daily highs at 0.8418, while GBP/USD falls decisively below 1.2100.

EUR/GBP remains supported by the 0.8350 area

EUR/GBP has so far left behind three consecutive daily pullbacks from the monthly high just below 0.8500 on 12 Aug. The break of the 200-day simple moving average – today at 0.8430 – opened the door for more weakness in the coming days, although the euro seems to want to recover that zone.

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In this way, the cross reverses the initial low towards the 0.8385/80 band after the boost of the British pound following the publication of the UK inflation figures for the month of July. According to the latter, headline inflation increased to 10.1% annually in July after rising 0.6% in the month.

The initial reaction to the CPI release prompted investors to forecast further (and higher?) rate hikes by the Bank of England (BoE) at its upcoming meetings, which in turn led to further hikes in the pound . However, the BoE’s latest dovish trend and the prospect of a 15-month recession in the UK economy threaten a strong pound going forward.

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Another report showed a revision to the GDP figures for the second quarter of the Eurozone, which showed a GDP growth of 3.9% year-on-year.

key levels

The cross is gaining 0.13% at 0.8415 and faces the next hurdle at 0.8434 (200 SMA), followed by 0.8492 (Monthly High Aug 12) and then 0.8584 (Weekly High Jul 21). On the other hand, the break of 0.8386 (weekly low Aug 17) would expose 0.8339 (monthly low Aug 2) and finally 0.8249 (monthly low Apr 14).

EUR/GBP

Panorama
Last Price Today 0.8414
Today’s Daily Change 0.0005
Today’s Daily Change % 0.06
Today’s Daily Opening 0.8409
Trends
20 Daily SMA 0.8431
50 Daily SMA 0.8504
100 Daily SMA 0.8472
200 Daily SMA 0.8439
levels
Previous Daily High 0.844
Previous Daily Minimum 0.8405
Previous Maximum Weekly 0.8493
Previous Weekly Minimum 0.841
Monthly Prior Maximum 0.8679
Previous Monthly Minimum 0.8346
Daily Fibonacci 38.2% 0.8418
Daily Fibonacci 61.8% 0.8427
Daily Pivot Point S1 0.8396
Daily Pivot Point S2 0.8383
Daily Pivot Point S3 0.8362
Daily Pivot Point R1 0.843
Daily Pivot Point R2 0.8452
Daily Pivot Point R3 0.8465

Source: Fx Street

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