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EUR/GBP a sell on rallies?

FXStreet (Guatemala) - EUR/GBP is trading at 0.7886, up 0.62% on the day, having posted a daily high at 0.7892 and low at 0.7802.

EUR/GBP is well bid and remains so on the back of th UK’s inflation report that came out more dovish than expected and puts into question of the BoE’s timings to resume a normal policy of interest rates next year. However, analysts at Rabobank explained that the BoE will almost certainly be hiking rates before the ECB. “Based on this outlook we view rallies in EUR/GBP as selling opportunities and maintain a medium-term target of EUR/GBP 0.76”. Aside from the inflation report, the unemployment rate was also a disappointment reading 6.0% vs 5.9% and also the claimant count change read -20.4k vs -22.0k, so there is some damage there that needs to be contemplated by sterling traders also.

EUR/GBP noteworthy levels

With spot trading at 0.7886, we can see next resistance ahead at 0.7902 (Weekly Classic R2), 0.7921 (Daily 100 SMA), 0.7940 (Weekly Classic R3) and 0.8016. Support below can be found at 0.7880 (Daily Classic R3), 0.7874 (Weekly Classic R1), 0.7865 (Daily Classic R2), 0.7859 (Daily 20 SMA) and 0.7851 (Daily Classic R1).

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