- EUR/GBP extends upside to hit fresh 3-year highs, techs support further gains.
- Crucial data coming ahead: UK inflation and German ZEW sentiment index.
- Expectation is for UK CPI to have contracted 0.1 percent during last month, while prices are seen gaining 1.5 percent over the last twelve months.
- German ZEW business sentiment index is expected to show a sharp rebound in July. The headlines number is expected to rebound to 2.1 versus a sharp -6.8 percent drop seen in June.
- A decisive break above 0.8730 could see a test of 0.8770 (Aug 2013 high).
- Strong support is seen at 0.8650 (1H 50-SMA), while 0.8730 is immediate resistance on the upside.
Recommendation: Good to buy dips around 0.87, SL: 0.8650, TP: 0.8730/ 0.8770/ 0.88
