EURGBP

Today the UK Construction was horrible while tomorrow the world prepares for the hike in ECB rates.  Couple that with some US dollar weakness numbers this morning and you get a pretty good move up in the EURGBP.  The catalysts?  Demand for EUROs, selling pressure in dollars and a confused predicament in the UK and US as the market tries to figure out if they should sell USD or GBP. 

Much of the pressure in the EURUSD is from selling in the EURGBP.  This pair has moved through the 61.8% retracement at the 0.7868 level and really does not have any real technical support until the 0.7821 level. 

Although the pair has helped the EURUSD lower today, the EURUSD may help the EURGBP bottom if the 1.5489 level finds support in the EURUSD.

The EURGBP has come under pressure this morning as the data out of the regions today were supportive to the GBP (-0.2% versus expectation of -0.5%) and not to the EUR (Industrial New Orders down -1.0 MoM and -2.5% YoY). 

The EURGBP which has been rising, ran into profit taking which pushed the pair sharply lower through trendline support at the 0.7964 then the 100 bar moving average on the 4 hour cahrt at 0.7943.  The next real support comes in at 0.7910. 

Again spot makes a new high yet the rsi indicator does not
Again this divergence is sign of a building top

The EURGBP is testing the 200 hour moving average at 0.8003.   The market should provide key support for the time period.  GBP has supported today on reports the Treasury will announce a plan to ease the mortgage bottleneck.

Not only is the EUR topping charts vs. the USD, but also vs. the GBP.  This EUR momentum was achieved after the strong inflation/CPI data gave an good indication that the ECB will not be cutting interest rates anytime in the near future. 

The EURGBP hits another record high this morning geting as high as .8043.  We are sitting at this high currently and will see how much stronger the EUR can get vs the GBP. 

The EUR hit record highs vs. the GBP earlier in the week.  With the GBP rate cuts yesterday morning and on speculation that more cuts are highly probable, the EUR made strong gains and challenged that high once again.  There is strong sentiment that the US's economic troubles are officially spilling over to the UK.  With the weak GBP housing numbers and fear of a slowing economy, it seems very likely that the BOE will become more aggressive going forward.

EUR/GBP paid on an hourly but after the contained movement over night, the pair hasn't done much, after reaching stiff resistance near the .8000 level.