- A relatively data-heavy week for the UK, with CPI reading on Tuesday, average earnings and unemployment claims on Wednesday, and UK retail sales figures on Friday.
- Last week, the Bank of England (BoE) opted to keep its main interest rate unchanged at 0.50%, as widely expected, but also went on to issue a rather dovish statement.
- EUR/GBP has been trading a rising channel since Dec 2015, broke above channel top on Friday, 15th trade, but has been struggling to extend gains beyond.
- The pair has dipped below 0.7640 (channel-top) which is strong resistance level, expect further consolidation before next move higher.
- On the weekly charts, the pair has edged above the cloud, and weekly cloud top at 0.75 is strong support on the downside.
- On the monthly charts, we see indications of a reversal in the underlying downtrend, 0.7870 levels likely target for end Q3 2016
Recommendations (for Medium-Term: 2-3 months): We would go long around 0.76 levels, SL: 0.74, TP: 0.7870/0.80
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