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Forex: EUR/GBP sidelined for now

FXstreet.com (London) - The pair has been lower on stronger cable and a softer Euro after the German GDP data disappointment in the morning and dissipating data from the US. in the afternoon.

It has been supported at 0.8455/60, which is protecting a further decline in the pair. We have seen some dollar weakness and a rise in cable after the latest string of US data showed the NY Empire State manufacturing index unexpectedly fell in May, while producer prices dropped 0.7% in April, supporting the case that it is too early to talk about Fed tapering off QE3. The Inflation report came in as expected and Inflation expectations were revised. King was cautiously optimistic but warns that the recovery will not be a normal recovery, as the recession is one that is unprecedented. The pair continues to oscillate in a tight range supported at 0.8450 with the SMA 200 reading and also supported with SMA 100, which is also offering a bullish signal while cable still remains weak. Note that the charting pattern's offer a falling wedge shape which the pair broke through the top side of yesterday, and a close above the figure 0.8500 this week might attract bids and perhaps larger players who have otherwise been sitting on the side-lines.

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