EUR/GBP Breaks Key Support Ahead of UK’s CPI Report
- EUR/GBP traded lower from the 0.8620 resistance zone.
- It traded below a major bullish trend line with support near 0.8465 on the 4-hours chart.
- EUR/USD recovered above 1.0470, and GBP/USD tested the 1.2500 resistance zone.
- The UK CPI could increase 9.1% in April 2022 (YoY).
EUR/GBP Technical Analysis
The Euro gained pace above the 0.8550 resistance zone against the British Pound. However, EUR/GBP struggled to gain strength above 0.8600 and corrected lower.
Looking at the 4-hours chart, the pair traded as high as 0.8618 before it started a downside correction. There was a move below the 0.8530 support zone and the 100 simple moving average (red, 4-hours).
The pair declined below the 50% Fib retracement level of the upward move from the 0.8249 swing low to 0.8618 high. There was also a break below a major bullish trend line with support near 0.8465 on the same chart.
It tested the 61.8% Fib retracement level of the upward move from the 0.8249 swing low to 0.8618 high. If there is a downside break below the 0.8390 level and the 200 simple moving average (green, 4-hours), there could be more downsides.
The next key support is near 0.8300. If there is another increase, the pair might face resistance near the 0.8465 level. The next major resistance is near the 0.8500 level. A clear move above the 0.8500 level might push the pair towards the key 0.8620 resistance zone.
Looking at EUR/USD, the pair started an upside correction above the 1.0500 level. Besides, GBP/USD is now facing a major resistance near 1.2500.
- UK Consumer Price Index for April 2022 (YoY) – Forecast +9.1%, versus +7% previous.
- UK Core Consumer Price Index for April 2022 (YoY) – Forecast +2.6%, versus +1.1% previous.
- Canadian Consumer Price Index for April 2022 (MoM) – Forecast +0.5%, versus +1.4% previous.
- Canadian Consumer Price Index for April 2022 (YoY) – Forecast +6.7%, versus +6.7% previous.