EUR/GBP reverses UK CPI-led slide, refreshes session peak post German ZEW

The EUR/GBP cross reversed UK CPI-led downward spike back closer to session low and jumped to fresh session tops near 0.8540 region following German ZEW survey.

The better-than-expected release of German ZEW economic sentiment index, coming-in at 19.5 for April as compared to 14 and previous month’s 12.8, thus assisting the cross to recover early lost ground led by the UK inflation figures. 

Earlier during the day, spot ran through some fresh offers after the UK data showed headline inflation, as measured by CPI showed prices rose 0.4% m-o-m during March. The reading was slightly better-than 0.3% expected but failed to lift the yearly rate, which held stable at 2.3% for March. 

Meanwhile, additional details revealed that core CPI ticked-lower to 1.8% on yearly basis, down from 2.0% previous and 1.9% expected, and helped limit further downslide for the cross. 

   •  UK annualized CPI stays unchanged in March, core figures disappoint

Technical levels to watch

Immediate support is pegged near 0.8515-10 region, below which the cross seems to accelerate the slide towards 0.8485-80 support area before eventually heading towards 0.8430-25 horizontal area.

On the upside, momentum above 0.8555 level is likely to get extended towards 0.8580 horizontal resistance ahead of the very important 200-day SMA hurdle near 0.8595-0.8600 region.