EUR/GBP Approaching Key Support Targets– 8400 in Focus Ahead UK CPI
- EURGBP approaching technical support- Broader outlook remains bearish
- Updated targets & invalidation levels
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Technical Outlook: EURGBP is attempting to break below the monthly opening-range lows with the decline approaching some key confluence-support targets of interest at 8454 & 8408. This zone is littered with Fibonacci considerations as well as the 200-day moving average and slope support. A break below this threshold would likely see accelerated losses for the pair with such a scenario targeting support objectives at 8349 and the 100% extension at 8262. Resistance stands at the monthly open backed by broader bearish invalidation at 8627.
Notes: A closer look at price action highlights a quick fill of the Sunday-open gap before continuing lower and keeps the focus on upcoming support targets at 8454 & key support at 8390-8408. Ultimately we are looking for the break of this support but in the meantime, shorts should use caution.
Interim resistance stands at 8530 backed by 8582 with a breach above the upper parallel (grey) / 8627 needed to invalidate the broader decline off the January highs. A quarter of the daily average true range (ATR) yields profit targets of just 19-21 pips per scalp. Keep in mind UK CPI is on tap tomorrow with consensus estimates calling for a headline print of 1.9%, up from 1.6% (would be the highest since June 2014). Core inflation is expected to rise to 1.7% and would mark the highest pace of price growth since August of 2014. From a trading standpoint, I would be looking for a reaction into these upcoming key support targets with any strength towards structural resistance on data to be viewed as an opportunity for re-entry.
Relevant Data Releases
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---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.