EUR/GBP: traders tug of war over UK CPI data/fundamental economics and geopolitics with the Brexit saga. EUR/GBP supported at the 100-D SMA and EUR/USD bulls guarding a key fib retracement level – Sterling rallies back into the rising wedge as well. EUR/GBP has been whipsawed on economic and political fundamentals, moving in a range between 0.8861 and 0.8920 whereby UK CPI was a big beat, 2.7% vs 2.4% forecasted and 2.5% previous y/y for August that sent the pair lower to test Asia’s low and the lowest level since the BoE last hiked justifying the BoE’s decision to raise rates last month. Currently, the cross trades at 0.8880 as markets soak up all of the latest dramas from the world of UK/EU Brexit politics. EUR/GBP spikes above 0.89 on latest Brexit headlines Having digested the latest headlines surrounding the UK’s economic performance and Brexit negotiations, the cross has settled between 0.8870/80 at the time of writing. The surprise UK CPI seems to be underpinning the pound vs the greenback as it knuckles down and marches back into the ascending wedge/channel. However, the dollar weakness is broad-based and EUR/USD bulls have stepped in guarding the 38.2% fib retracement of the 1.1733/1.1525 drop at 1.1653 (low has been 1.1650) – The cross has subsequently found a bid on that. UK CPI fastest pace of inflation since February – BUT … “Despite the UK CPI data, Brexit worries and a languid economy means little prospect of another rate hike before the UK formally leaves the EU,” – analysts at ING Bank argued adding: “Sterling had a bad run Jun-Aug so there could be some currency pass through into prices…If today’s inflation rise is due to currency, the momentum should fade. Instead, we think it is largely noise with inflation set to return to the 2% target early next year.” The analysts concluded that the economy continues to underperform key partners, and inflation remains broadly in line with the Bank of England’s target: “Given the twists and turns of the Brexit negotiations, we continue to think the BoE will wait until after the UK formally leaves the EU in March next year before seriously considering raising interest rates again. This suggests May is the most likely point for the next 25bp move.” Brexit latest … So far today, the headlines have been mixed, but soured in all in all by the comments from the UK Treasury minister who said that there could be another referendum if Chequers is rejected by parliament which means that PM May must bring back a feasible proposition from Salzburg, ( where she is discussing Brexit matters with European leaders in informal talks), and her position as PM will again be under scrutiny if not and that is hindering sterling’s progress, more likely than the market taking the same view as the analyst’s rationale at ING – (i.e., the market’s knee-jerk will stay with the noise rather than trade the sounder rationale). Again, the major sticking point stays with her rejection of Barnier’s, (EU chief negotiator) improved Irish border Brexit offer. “European Council president Donald Tusk said Mrs May’s Chequers Brexit plan would need to be “reworked” in key areas, including on future trade relations and on the crucial question of the Irish border. However, he acknowledged that Mrs May’s compromise proposals did mark “a positive evolution of the UK’s approach” and showed a willingness to minimise the “negative impacts of Brexit”. He said that Brexit talks were now entering “a decisive phase” and he wanted to see a deal in the autumn, confirming that he would convene a special leaders’ summit in mid-November to try to broker an agreement. EU leaders strongly disagree with a central proposition in Mrs May’s Chequers plan that Britain should participate in some parts of the single market “” including manufactured goods and agriculture “” but not others – “ The Financial Times wrote. EU’s Tusk: Brexit talks are entering the decisive phase UK Chancellor Hammond: Confident we will deliver Chequers Brexit deal UK Brexit Sec. Raab: Will not hold a second referendum Former UK Brexit secretary Davis: We should not expect much from Salzburg meeting And from the ECB on the EU: ECB’s Draghi: Should not be discouraged that there is still work to do to complete our Union EUR/GBP levels Analysts at Commerzbank noted that EUR/GBP has sold off to the 0.8855/66 2nd August low and 5-month uptrend: “We look for it to stabilise and recover from here. In this vicinity we find the 0.8860 50% retracement and the 200-day ma at 0.8836 and while there is scope for these to be tested, we look for them to hold and provoke recovery. Note that the 0.8850 55 week ma is also found here. We should then see recovery once more to the 0.9101 recent high. Above here would target 0.9161 Fibonacci resistance and then the 0.9291 2009-2018 downtrend line.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next AUD/USD advances to 20-day high above 0.7250 as DXY fails to stay in positive territory FX Street 3 years EUR/GBP: traders tug of war over UK CPI data/fundamental economics and geopolitics with the Brexit saga. EUR/GBP supported at the 100-D SMA and EUR/USD bulls guarding a key fib retracement level - Sterling rallies back into the rising wedge as well. EUR/GBP has been whipsawed on economic and political fundamentals, moving in a range between 0.8861 and 0.8920 whereby UK CPI was a big beat, 2.7% vs 2.4% forecasted and 2.5% previous y/y for August that sent the pair lower to test Asia's low and the lowest level since the BoE last hiked justifying the BoE's decision to raise… Top Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.