EUR/GBP: correction continuing with eyes on 0.8556

Currently, EUR/GBP is trading at 0.8665, down -0.26% on the day, having posted a daily high at 0.8730 and low at 0.8655.

• BOE's Carney: Don't overreact to one month's data - RTRS
• BoE: MPC to look through inflation rise, but rhetoric likely to stay hawkish – Lloyds Bank

EUR/GBP's northerly trajectory was capped earlier after UK inflation rose to the highest level since Sep 2013. The cross dropped from 0.8726 and down to test the 200 smoothed ma at current spot. The euro had otherwise been supported on the French debate news overnight. 

Macros outperformed ad Le Pen came in joint last place in the Elabe poll. The cross made it through the 0.87 handle on the back of EUR/USD busting through resistance at 1.0780 and finding territory on the 1.08 handle for the first time since the start of Feb this year.  The focus will now turn to monetary policy with this latest inflation concern for the BoE and eyes will be on the ECB in this respect as well until Brexit negotiations start to roll in once Article 50 is finally triggered on the 29th March.

EUR/GBP levels

Analysts at Commerzbank explained that EUR/GBP's near-term outlook is neutral: "The market remains near-term downside corrective. We suspect that the market has lost upside impetus and will slide back to the 55-day ma at 0.8598. Above 0.8800, there is scope to tackle the 0.8852 January high. We look for the downside currently to be limited by the 200-day ma at 0.8556. Failure here will re-target the 0.8401 February low."