FxWirePro: EUR/GBP hovers around 21-EMA, focus on Fitch's Italy rating and Eurozone inflation

EUR/GBP chart on Trading View used for analysis

• EUR/GBP is extending range trade around 21-EMA, with session high/low at 0.8975/ 0.8960 respectively.
  
• Markets now focus on Fitch's assessment of Italy's credit worthiness and Eurozone inflation data for further direction.
  
• If ratings agency Fitch downgrades Italy, the pair may see further bearishness.
  
• In the above scenario, a better-than-expected Eurozone August inflation data (09:00 GMT) may not able to provide any support.
  
• On the other hand, if Fitch keeps ratings unchanged, then upbeat EZ inflation data could add to the positive tone around the common currency.
  
• EUR/GBP pivotal at 21-EMA. Finds next immediate support at 0.8950 (minor trendline).
  
• Break below could see drag till 0.8850. While failure to break below 21-EMA could see test of 1H 200 SMA at 0.9012.

Support levels - 0.8973 (21-EMA), 0.8911 (50-DMA), 0.8828 (200-DMA)

Resistance levels - 0.8985 (23.6% Fib), 0.9013 (5-DMA), 0.9098 (Aug 28 high)

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -12.9038 (Neutral), while Hourly GBP Spot Index was at 98.0745 (Bullish) at 0530 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.