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EUR/GBP – At A Key Pivot
This year the story of the EUR/GBP has been marked by a strong downward trend only to be interrupted by sharp counter trend rallies. The pair eventually drifted to 6950 but now finds itself above the 7100 mark and could be in the process of carving out a button.
The decline in the pair has been driven both by the problems in the EZ and the prospect of rate hike in UK. However with Greece now once again pacified and most of the key economies in the region relatively stable, the bear case for the euro may over for the time being.
Meanwhile the prospect of UK rate hike looks remote at best. Tonight the market will get a look at UK CPI data which expected to remain at 0.0% just like last month. With price pressures effectively non-existent, its difficult to see how the BOE can even consider raising rates and if the numbers once again print cool then EUR/GBP could pop through the key resistance of 7200 too solidify a higher low double bottom.