FxWirePro: EUR/GBP tests channel support post EZ inflation data, short on break below 0.7330

Markets disappointed by below estimates Euro zone CPI figures, EUR bulls spooked by disappointing numbers.

• Euro zone Dec CPI data came in at 0.2%, the same seen in Nov, but below expectations for a 0.4% rise, while the Core CPI also matched the previous reading.
   
• EUR/GBP slipped to daily lows struck near key support zone around 0.7330, but pared losses to trade at 0.7337.
   
• Watchout for breaks below 0.7330 for further weakness, falls upto 0.7255 (38.2% Fib of 0.69841 to 0.7346 rise) then likely.
   
• 10-DMA at 0.7356 is immediate resistance on the upside, while 0.7330 which is rising channel base is strong support on the downside.

Recommendation: Short EUR/GBP on breaks below 0.7330, SL: 0.7370, TP: 0.7275/0.7255