EUR/GBP taps 0.8700 handle after UK CPI, up-next EU GDP

The EUR/GBP cross built on to its recovery momentum and has now risen to 0.8700 handle following the release of UK CPI print.

According to the data released by Office for National Statistics, UK headline inflation, as measured by CPI, fell short of expectations and eased to 0.1% m-o-m during October from previous month's 0.2%. The yearly print also ticked lower to 0.9% as compared to September's 1.0% and 1.1% expected. Meanwhile, the core CPI (excluding volatile food and energy prices) dropped to 1.2% on a yearly basis from 1.5% recorded previously and expected. 

Adding to disappointing UK CPI print, bid tone surrounding the shared currency, despite of mixed German and Italian GDP print for the third quarter of 2016, is also supporting the pair's recovery trend on Tuesday.

Next on tap would be the composite Euro-zone GDP print for the quarter ended September and would be looked upon for fresh impetus for the cross. 

Technical levels to watch

A follow through buying interest above 0.8700 handle, the cross seems to aim towards 50-day SMA resistance near 0.8765-70 region before surpassing 0.8800 handle towards testing its next major hurdle near 0.8875-80 area. On the downside, 0.8630 level now seems to act as immediate support, which if broken could drag the cross back below 0.8600 handle towards Friday's swing low support near 0.8570-65 region.