Key Points
- The Euro traded higher vs the British Pound recently, but it found sellers near 0.7985.
- The EURGBP pair is currently trading near a bullish trend line formed on the hourly chart, which may play a major role in the short term.
- A break below the trend line may call for more losses in EURGBP moving ahead.
- Tomorrow, the UK Consumer Price Index will be released by the National Statistics, which may impact the GBP vs the USD and the Euro.
Technical Analysis
The Euro had a good run against the British Pound recently, as it traded above the 0.7950 level, but failed to test the 0.8000 level. There is a bullish trend line formed on the hourly chart of EURGBP, which is acting as a support and pushing the price higher.
However, it looks like the pair is forming a topping pattern near 0.7985, and may break the trend line support for a downside move.
A break may take the EURGBP pair towards the 38.2% Fib retracement level of the last wave from the 0.7809 low to 0.7986 high.
UK Consumer Price Index
Today, there is no event lined up in the UK and the Euro Zone. However, the UK Consumer Price Index will be released by the National Statistics tomorrow, which may impact the British Pound to a great extent in the near term.
The market is expecting the measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services to increase by 0.4% in May 2016, compared with May 2015. Any major miss in the outcome may weight on the GBP.
In short, if you are looking to trade EURGBP, then keep a close eye on the highlighted trend line and support area.
