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Forex: EUR/GBP rallies to 0.8325 resistance on UK inflation data

By FXstreet.com,  January 15, 2013, 04:56:00 AM EDT

FXstreet.com (Barcelona) - The release of the UK CPI inflation report allowed the EUR/GBP to regain its position at 0.8325, that has been serving as resistance against further upside since yesterday. Throughout the day, the cross drew a "U" shaped line as it fell from those highs to test the 0.8300 psychological level as support, only to get back to 0.8325 during the London session.

The actual CPI inflation report came in as expected at 2.7% (YoY) and 0.5% (MoM), whlie the Core figure declined from 2.6% to 2.4%. Both PPI input and output contracted unexpectedly, by -0.2% and -0.1%, respectively. The annualized Retail Prices Index rose from 3% to 3.1%. DCLG House Price Index improved from 1.5% to 2.1% (YoY) in November.

"EUR/GBP has maintained upside pressure and will shortly encounter the top of its trend channel, this is located at 0.8355 and we would expect this to hold the initial test of the topside", wrote Commerzbank analyst Karen Jones, warning for potential short term consolidation, with interim support at 0.8221/0.8190 (previous January 2012 low), and key support is the base of the channel at 0.8091.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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