EUR/GBP has recently rejected the resistance at 0.8850 in a non-volatile bullish trend. GBP is likely to extend gains on the back of positive CPI report which was published at 2.9% versus the expected level at 2.7%. Along with CPI report, Core CPI, RPI and HPI reports were also positive which provided support to GBP. Today the UK Average Earning Index is going to be published. It is expected to be unchanged at 2.4%. Besides, the Claimant Count Change is expected to decrease to 12.5k from 19.4k previously and the unemployment rate is expected to be unchanged at 4.6%. With a heavy economic calendar today, a good amount of volatility will likely hit the market and we might see further gains on the GBP side against EUR. In the eurozone side, the German Final CPI was published with an unchanged figure at -0.2% which was expected to be positive at 0.5% so GBP rose further against EUR. The Eurozone Employment Change report is also going to be published which is expected to be unchanged at 0.3%. Along with it, the industrial production data is likely to show an increase to 0.5% from -0.1%. The eurozone economic reports are not quite important today so they will not create much volatility. Therefore, GBP is expected to gain further against EUR in the coming days despite the bullish trend in the pair.
Now let us look at the technical view. The price has bounced from the resistance at 0.8850 which was also touched in January 2017. After that the price moved lower towards 0.8300 area. Currently, the price is showing bearish impulsive movement which is expected to continue till 0.8700 area at 20 EMA support. If 20 EMA support is broken below at a daily close, we will be looking forward for further down move towards 0.8530-0.8420 support area. As the price remains below 0.8850, bearish bias is expected to continue in this pair.
