EUR/GBP in daily highs above 0.8500 on UK inflation

The bout of weakness around the British Poind is now pushing EUR/GBP to the area of session highs beyond the critical barrier at 0.8500 the figure.                          

EUR/GBP bounces off 2-month lows

The European cross is posting gains for the first time after six consecutive sessions, coming down from last week’s tops in the mid-0.8600s and looking to extend the rebound from the area of 2-month lows near 0.8450.

Today’s UK CPI figures have come in below estimates, hurting GBP and adding to the cross upside. In fact, headline prices rose 1.8% on a yearly basis and contracted 0.5% inter-month during January.

On another direction, the resilience around GBP has been behind the recent 2-cent drop in the cross, exacerbated further by the renewed selling pressure around the EUR seen in past sessions.

GBP remains well supported by alleviated concerns of a ‘hard Brexit’ scenario in light of the imminent triggering of Article 50, while UK fundamentals has been also collaborating with GBP-buying as of late.

EUR/GBP key levels

The cross is now up 0.69% at 0.8518 and a break above 0.8557 (high Feb.8) would expose 0.8560 (20-day sma) and then 0.8648 (high Feb.6). On the flip side, the next support aligns at 0.8451 (low Feb.13) ahead of 0.8446 (2017 low Jan.3) and finally 0.8298 (low Dec.5 2016).