Key Highlights
- The Euro started a nice upside move from the 0.8620 low against the British Pound.
- The EUR/GBP pair is attempting an upside break above a crucial bearish trend line at 0.8695 on the 4-hours chart.
- The UK CPI in March 2018 increased 2.5% (YoY), less than the forecast of +2.7%.
- Today, the UK Retail Sales report for March 2018 will be released, which is forecasted to decline by 0.5% (MoM).
EURGBP Technical Analysis
The Euro found a strong support near the 0.8620 level against the British Pound recently and started an upside move. The EUR/GBP pair grinded higher and broke the 0.8650 and 0.8680 resistance levels.
More importantly, the pair moved above the 50% Fib retracement level of the last decline from the 0.8739 high to 0.8620 low. The pair seems to be trading with a bullish bias above the 0.8680 level.
Additionally, the pair is attempting an upside break above a crucial bearish trend line at 0.8695 on the 4-hours chart. On the upside, the 100 simple moving average (red, 4-hours) is positioned at 0.8718 to act as a hurdle for buyers.
A push above the 100 SMA and the 0.8720 level could open the doors for more gains in the near term. On the flip side, if the pair corrects lower, the 0.8680 and 0.8650 levels are likely to act as a strong support levels.
Recently, the UK saw the release of the CPI by the National Statistics. The market was looking was a rise of 0.3% in the CPI in March 2018 compared with the previous month.
However, the result was on the lower side as there was a rise of 0.1% in the CPI, which was also less than the last +0.4%. In terms of the yearly change, the CPI came in at 2.5%, which was less than the forecast of +2.7%.
The report added:
Price movements for alcoholic drinks and tobacco also made a downward contribution to the change in the rate; this in part reflects changes to the Budget cycle that were introduced in 2017, with tax changes for tobacco being announced in November 2017 instead of March 2018.
There was a downside reaction in GBP/USD and EUR/GBP moved higher. Going forward, today’s retail sales report could define the next move in the British Pound.
Economic Releases to Watch Today
- UK Retail Sales for March 2018 (YoY) – Forecast +2.0%, versus +1.5% previous.
- UK Retail Sales for March 2018 (MoM) – Forecast -0.5%, versus +0.8% previous.
- UK Retail Sales ex-fuel for March 2018 (YoY) – Forecast +1.4% versus +1.1% previous.
- US Initial Jobless Claims – Forecast 230K, versus 233K previous.
