FxWirePro: EUR/GBP breaks major trendline resistance at 0.89, eyes 61.8% Fib at 0.9044

• EUR/GBP hits fresh 4-month highs at 0.8923, more upside on cards.
   
• GBP tumbled across the board after UK’s inflation figures failed to meet expectations.
   
• UK headline CPI rose at an annualized 2.4% y/y missing forecasts at 2.6%. Core CPI fell to 1.9% y/y.
   
• Poor inflation figures could pour cold water over expectations of a rate hike by the Bank of England at its August meeting.
   
• Technical indicators support further gains in the pair. We see scope for test of 61.8% Fib at 0.9044.
   
• Price action has bounced off 200-DMA which is strong support at 0.8818. Break below will negate any bullish bias.

Support levels - 0.89, 0.8863 (5-DMA), 0.8837 (21-EMA), 0.8818 (200-DMA)

Resistance levels - 0.8968 (Mar 7 high), 0.90, 0.9014 (Nov 15 high)

Recommendation: Good to go long on close above 0.89 handle, SL: 0.8860, TP: 0.8965/ 0.90/ 0.9045.

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -40.3731 (Neutral), while Hourly GBP Spot Index was at -96.9578 (Bearish) at 0745 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.