FxWirePro: EUR/GBP snaps 7-day bearish streak, pound dented on softer-than-expected UK CPI data

Chart - Courtesy Trading View 

EUR/GBP was trading 0.38% higher on the day at 0.8856 at around 07:50 GMT, breaks above 21-EMA.

The pair has snapped a 7-day bearish streak and has spiked higher after the release of softer-than-expected UK CPI data.

Data released by the UK Office for National Statistics earlier on Wednesday showed that the headline CPI declined by 0.6% in January, more than the 0.4% fall expected. 

Further, the yearly rate decelerated from 10.5% in December to 10.1% during the reported month, again missing estimates for a reading of 10.3%. 

Moreover, Core CPI, printed at 5.8% YoY as compared to the 6.3% previous and 6.2% expected.

Easing inflationary pressure could allow the Bank of England (BoE) to slow the pace of its policy-tightening, which, in turn, weighs on the British Pound. 

Support levels - 0.8841 (21-EMA), 0.8794 (55-EMA)

Resistance levels - 0.8880 (200H MA), 0.8953 (Upper BB)

Summary: EUR/GBP has paused downside at 55-EMA support, further weakness only on break below. Major trend is bullish and bounce off 55-EMA has raised scope for upside resumption. Watch out for close above 21-EMA for more gains.