EUR/GBP: rethinking technical bias while above key resistance line 0.8552

Currently, EUR/GBP is trading at 0.8582, up 0.86% on the day, having posted a daily high at 0.8598 and low at 0.8504.

EUR/GBP has started to consolidate on the 4hr sticks the massive bid from below the 0.84 handle we have seen this month to just shy of the 0.86 handle. Markets are focussing on the ECB again and pricing in a change of tone from the Central Bank in respect to its monetary policy following the Macron victory that has calmed the political environment down enough to potentially warrant a change of stance from the bank in respect to its QE programme. Also, Eurozone growth numbers and the ZEW survey helped the euro overnight. GDP also data showed that the economy expanded at a 0.5% q/q rate.

• ECB's Coeure: Recent measurable increase in long-term yields has not affected our monetary policy stance
• UK: Surging inflation won't bring forward rate hikes - ING

Across the channel, the pound was unable to capitalise on its own fundamentals in the surprisingly strong CPI data that beat expectations. The CPI data for the month of April climbed as high as 2.7% on yearly basis. vs the expected 2.6% expected and previous 2.3%. The PPI was another higher than expected result. Factory output prices up by 3.6% yearly basis above the 3.4% expected. 

EUR/GBP levels

EUR/GBP has rallied through the seven-month resistance line at 0.8552 and now brings 0.8641 as a key target on a break of 0.8610 is the 23rd March lows. 0.8732 is the 28th March high. On a drop back,  0.8334/04 is a key support region ahead of the 0.8252 the July 2016 low.