EUR/GBP: consolidating the wild swings, not the norm for the cross

Currently, EUR/GBP is trading at 0.8478, up 0.23% on the day, having posted a daily high at 0.8533 and low at 0.8456.

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EUR/GBP is consolidating after the unusual practice action with the wild swings reversing rallies in sterling that has been making a comeback this year on renewed optimism from the likes of Forbes in the UK economy and reflation calling for higher rates. The EU project is under threat with Brexit, Greece and the populist parties in Holland and France making headlines of late starting their campaign of anti-immigration and euro in the case of Le Pen. 

Elsewhere, the following data impacted the cross negatively with:

• European Monetary Union Gross Domestic Product s.a. (YoY) came in at 1.7%, below expectations (1.8%) in 4Q
• UK Jan CPI rises to the highest rate since June 2014, but misses estimates
• United Kingdom PPI Core Output (YoY) n.s.a came in at 2.4%, above forecasts (2.2%) in January

EUR/GBP levels

Analysts at Commerbank explained that EUR/GBP had sold off to the 200-day ma at 0.845 while noting that we have not been below here since Dec 2015. "A close below here will be deemed very negative and this guards the 0.8304 December low. Initial resistance lies at 0.8573 resistance line. The market has recently failed ahead of the top of the cloud at 0.0.8677 and imoku 2 at 0.8660. Only above 0.8677 would allow for another run up to key resistance offered by Fibo resistance and the recent high at 0.8852/53. We assume that 0.8852/53 is a short term top for the market."