FxWirePro: EUR/GBP capped between major moving averages, break above cloud raises scope for upside

EUR/GBP chart - Trading View 

Spot Analysis:

EUR/GBP was trading 0.14% higher on the day at 0.8577 at around 15:20 GMT

Previous Week's High/ Low: 0.8593/ 0.8542

Previous Session's High/ Low: 0.8588/ 0.8557

Data Watch:

Business Confidence in Spain slipped to 0.1 in August from 1.4 in the previous month.

Spain Retail Sales expanded 0.1% MoM in the same period and the CPI was up 0.4% MoM and 3.3% from a year earlier.

In the broader Euroland, the final Consumer Confidence tracked by the European Commission (EC) came in at -5.3 and the Economic Sentiment eased to 117.5 from 119 in the prior month.

Details of the report showed sentiment fell sharply in France and the Netherlands, and to a lesser extent in Italy, Poland and Spain. In Germany, sentiment remained virtually unchanged.

According to the preliminary estimate published by Destatis, Germany CPI decelerated sharply in August and remained flat as compared to the 0.9% rise recorded in the previous month. On a yearly basis, the CPI edged higher to 3.9% from 3.8% in July.

Further the Harmonized Index of Consumer Prices (HICP), the European Central Bank's preferred gauge of inflation, matched expectations and rose to 3.4% annually from 3.1% reported in the previous month.

Technical Analysis:

- EUR/GBP is extending sideways, sandwiched between 110 and 55 EMAs

- Momentum is bullish, Stochs and RSI are sharply higher, RSI is well above 50 mark

- MACD is above zero and supports upside, ADX is rising in support of gains

- Volatility is high and rising, GMMA shows minor trend is bullish

Major Support and Resistance Levels: 

Support levels - 0.8551 (55-EMA), Resistance levels - 0.8595 (110-EMA)

Summary: EUR/GBP is grinding sideways between 55 and 110 EMA. Decisive break above will decide further direction for the pair. Bias is bullish, decisive break above cloud will propel the pair higher. Next major bull target lies at 23.6% Fib at 0.8634.