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Forex Crunch:
EUR/GBP Outlook
The free-fall in EUR/GBP has highlighted the potential in cross-pair analysis, says Yohay Elam at Forex Crunch. Catch Yohay, and TheLFB trade team on ForexTV Live.
Backed by significant economic figures, EUR/GBP continues the free fall, quickly approaching the next line of support. Here’s an update on this cross.
EUR/GBP continues to be a rather predictable currency pair. The support and resistance lines are more clear here than in many other pairs.
Strong British inflation
British inflation is lifting its head. After rising to an annual rate of 1.9% last month, it leaped to 2.9% this time. A rise to 2.6% was predicted. This leap almost reached the government’s inflation target of 1-3%. Also Core CPI surprised by jumping to 2.9% rather than 2.3% that was predicted, and the RPI (Retail Price Index) completed the picture with a rise to 2.4%, exceeding expectations and also leaping from 0.3%. RPI has been negative for many months.
If the CPI was little higher, and Mervyn King would have to send an open letter explaining the reasons for this and laying out the means he thinks of using against it – a rate hike in the near future. BOE Governor Mervyn King will make a public appearance anyway later. The Pound enjoyed this data and continued to rise. GBP/USD already reached 1.6450. Full Detail...