FxWirePro- EURGBP Treads Water at 0.8640 as UK CPI Test Looms - Bears Target Support Break

EURGBP trades flat ahead of major UK economic data this week. Intraday bias remains bearish as long as the resistance  0.8750 holds. It hits an intraday high of 0.86416 and is currently trading around 0.86405.

Along with Producer Price Indices released on August 20, the UK will present important economic statistics, including August inflation statistics with CPI and core CPI both predicted at 3.8% YoY and the Retail Price Index at 4.5% YoY. With flash PMI readings suggesting contraction in manufacturing (48.6) but growth in services (51.7) and composite (51.8), Public Sector Net Borrowing is predicted at a £-2.1 billion deficit on August 21. Retail sales statistics for August 22 are anticipated to indicate modest growth, with a 0.3% month-on-month rise and 1.8% year-on-year, including sales excluding fuel, offering insights into consumer expenditure and economic momentum.

Technical Analysis

The pair is currently trading below 55 and  200- EMA and 365-EMA on the 4-hour chart.

Bearish Trend Confirmation: Any break below 0.8600 confirms an intraday bearish trend. A drop to 0.8560/0.8520/0.8480 is likely.

Near-Term Resistance:  The near-term resistance is around 0.8680. Any violation above will take the pair to 0.8750/0.8800/0.8850.

Indicator Analysis (4-hour chart)

CCI (50): Bearish

Average Directional Movement Index:  Neutral

Trading Recommendation

It is good to sell on rallies around 0.8700 with SL around 0.8750 for a TP of 0.8600.