EURGBP
The EURGBP pair is little changed today as the market digests the latest UK inflation data from the UK. The pair is trading at 0.8952, which is slightly below this week’s high of 0.9000.
Consumer prices rose slightly in October, according to the latest report by the Office of National Statistics (ONS). The data showed that the overall CPI fell from 0.4% in September to 0.0% in October. That was a better reading than the decline of -0.1% that analysts were expecting. On a year-on-year basis, the CPI increased by 0.7%, better than the expected 0.6%.
Without energy and food, consumer prices in the UK rose by 0.2% in October and at an annualised rate of 1.5%. The two were better than estimates.
Other numbers released by the ONS were better than estimates. For example, the retail price index rose by 1.3% while the PPI input fell by 1.3%. The consensus estimate for the latter was a 2.5% decrease. Similarly, the core PPI output and PPI input increased by 0.5% and 0.5%.
Looking ahead, the EURGBP will react to inflation data from the European Union that will come out in the next hour. The expectation is that consumer prices were also relatively lower as most European countries continued their battle against the pandemic.
Further data from the UK showed that car registrations decreased at an annualised rate of 1.6% in October. In Italy, the registrations fell by 0.2% while in Germany, car registrations fell by 3.6%.
On the four-hour chart, we see that the EURGBP price has been falling since September 11, when it reached a high of 0.9290. This month, it dropped to a low of 0.8863, which is a 4.60% drop from its September peak. The price remains below the descending red trendline and the important resistance level at 0.900. It is also slightly below the 25-day moving average.
Therefore, I suspect that the pair will continue falling in the near term, with the next support being at 0.8925.
