EUR/GBP: bearish prospects
The single currency is moving down not only versus the US dollar, but also against the British pound.
British pound was hit by the decline in the UK consumer prices. Further data from Britain though will likely confirm that its economy is on the firm track of improvement. On Thursday watch the release of the UK retail sales (0.4% growth after a 0.5% contraction is expected). This will keep in place the expectations of the rate hike in 2016. The euro, on the contrary, is pressured by the ECB’s easing and concerns about Greece.
Technically EUR/GBP looks bearish. The euro failed to return above the 200-month MA at 0.7377. On Wednesday it slid to 0.7130. The pair is trying to break down the flag pattern and resume the downtrend. A close below April low at 0.7116 is needed to confirm the break to the downside. First target will then be at 0.7015/00. In the longer term the euro may test even lower levels. Resistance is at 0.7350 and 0.7350.