FxWirePro: EUR/GBP rejected at 55-EMA, slips below 200H MA after upbeat UK CPI data

EUR/GBP chart - Trading View 

Spot Analysis:

EUR/GBP was trading 0.13% lower on the day at 0.8597 at around 09:00 GMT

Previous Session's High/ Low: 0.8628/ 0.8579

Previous Week's High/ Low: 0.8642/ 0.8568

Fundamental Overview:

The British pound was buoyed across the board after strong UK CPI stoked chances of a BOE rate hike.

Data released earlier today showed UK Consumer Prices Index (CPI) 12-month rate came in at +2.1% in May, beating estimates at +1.8% and compared to +1.5% in April.

Meanwhile, the core CPI rose by 2.0% YoY last month versus +1.5% registered in April, matching the consensus forecast of +1.5%.

The monthly figures showed that the UK consumer prices arrived at +0.6% in May vs. +0.3% expectations and +0.6% prior.

On the other side, German IFO institute cut the country’s 2021 GDP growth forecast to 3.3% from 3.7% previous due to supply bottlenecks.

Technical Analysis:

- The pair has snapped 4 straight week's of losses, but recovery lacks traction

- GMMA on the weekly charts shows major and minor trend are strongly bearish

- Recovery has seen multiple rejection at 55-EMA which is stiff resistance at 0.8625

- Price action has slipped below 200H MA

- Momentum studies are also bearish, MACD and ADX also support downside

Major Support and Resistance Levels:

Support - 0.8590 (5-DMA), 0.8562 (Lower BB), 0.8473 (110-month EMA)

Resistance - 0.8625 (55-EMA), 0.8677 (55-month EMA), 0.8682 (110-EMA)

Summary: EUR/GBP trades with a bearish bias. The pair finds stiff resistance at 55-EMA, any upside only on decisive break above.