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Forex: EUR/GBP still sidle lined in US session

FXstreet.com (London) - The EUR/GBP cross is printing 0.8465 to 0.8445 in a 20 pip range following the release of, a) US initial jobless claims, b) US CPI and c) housing starts which all came together at 13.30 BST.

Consumer Price Index (YoY and MoM) came in at +1.1% in April (against expectations of +1.3%) and -0.4% in April (vs. projections of -0.2%) respectively. In addition, the Consumer Price Index ex Food & Energy (YoY) climbed +1.7% in April, relative to a consensus of +1.8%. Initial jobless claims rose more than expected last week and further data showed mixed results from housing starts and building permits while initial claims unexpectedly rose to 360K in the week ended on May 14 vs. 328K in the previous reading. The markets price action has determined more of the sideways path for the pair but the market will most likely lean towards cable being the faster of the two to move in one direction or the other with the most momentum should there be any further reaction to come out of any more poor news for the dollar -eye's are on FED speeches. For instance, the risk to the downside in EUR/GBP is that long dollar positioning has been stacking up considerably and if today’s US data set (Claims/CPI/Philly) or Fed speakers (Rosengren/Raskin/Williams) paint a more dovish shadow, the market might be set for a correction which would could move EUR/GBP into a break out of this tight range. The range acts as support and resistance zones, and breakouts either way are within 50 pip ranges and pivots.

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