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Forex: EUR/GBP on top around 0.8580

FXstreet.com (Barcelona) - The cross continued climbing higher as the NY session started and the EUR/GBP printed a current daily high at 0.8582. The EUR is more prone to risk after ECB Draghi’s remarks, expecting Eurozone gradual recovery in the second half of 2013 and an operational ESM by mid 2014.
The Consumer Price Index in the Eurozone came in line with expectations, at 1.2% (MoM) and 1.7% (YoY) in March, while Core data rose from 1.3% to 1.5%, beating 1.4% consensus. The ZEW survey showed a decline in EMU economic sentiment, from 33.4 to 23.9 in April. In Germany, economic sentiment disappointed the market, falling from 48.5 to 36.3, below the expected 42.0. Current situation wasn’t good either, dropping from 13.6 to 9.2, below 12.0 consensus.

While annualized headline UK CPI came in unchanged at 2.8% as expected in March, the monthly change was of 0.3% (instead of 0.4% consensus) and Core (YoY) data came in at 2.4% (consensus of 2.3%). In regard to UK PPI, input fell -0.1% (MoM), less than the -0.2% expected, (annualized drop from 2.1% to 0.4% - consensus of 0.8%). Output PPI stayed unchanged at 0.3% (MoM) and 2.0% (YoY), but Core output was lower at 0.1% MoM (consensus of 0.2%) and 1.3% YoY (consensus of 1.4%). UK retail prices disappointed at 0.4%, below the 0.5% expected, but YoY data rose from 3.2% to 3.3% in line with consensus.

“The EUR/GBP is moving sideways between its support at 0.8490 and its resistance at 0.8560 (09/04/2013 high). A key support can be found at 0.8411 (01/04/2013 low)”, wrote MIG Bank analyst Bijoy Kar.

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