EUR/GBP sliding below 0.8850 ahead of EZ CPI on Friday
- GBP vulnerable to diplmomatic tensions, EU-UK transition deal, BOE's rate decision.
- Volatility is expected with Eurozone CPI data on Friday at 10.00 GMT.
The EUR/GBP is trading at around 0.8828 down 0.36% on the day as the GBP pairs have seen a lot of volatility on Thursday with UK-Russia diplomatic tension intensifying. Lavrov, the Russian foreign minister promised that Russia would soon retaliate. Adding even more price swings arehopes and fears linked to the EU-UK transition deal which should be concluded next week on March 22nd at the EU summit.
On the macro analysis front, Nomura’s analysts expect the Bank of England to possibly hike in May. More info can be found here.
Coming up next in the Eurozone are the inflation numbers on Friday at 10.00 GMT. Euro bulls will be on the lookout for any deviation to the upside in the CPI data. On the flip side, if the data disappoints traders might be quick to dump the Euro.
EUR/GBP daily chart
Technically, the EUR/GBP is sliding lower with mild momentum. It has broken its 100 DMA and is now testing an ascending trendline at the 50% Fibonacci retracement from the January 24-March 7 move higher. If the market can hold the 0.8830 level, the bulls can hope to form a base here ahead of EZ CPI, otherwise, the 0.8800, last swing low, becomes the next support followed by 0.8700, a cyclical low. To the upside, resistance is seen at 0.8900, 23.6% Fibonacci retracement and 200 DMA, followed by the 0.8960 level which is the last swing high.