Euro Sinks Against Pound as Inflation Fails to Impress
The Euro (EUR) declined against the British Pound (GBP) on Tuesday due to softer inflationary pressures in the Eurozone and disappointing German Retail Sales figures. The EUR/GBP pair retreated to 0.8560 from session highs around 0.8575 but remains within its two-day range, supported above 0.8555.
Data released by Eurostat showed that the preliminary Eurozone's Harmonized Index of Consumer Prices (HICP) grew at a steady 3.3% year-on-year pace in August, matching market expectations. However, core inflation slowed down to 2.4% from expected 2.5%. The Eurozone HCOB Manufacturing PMI was revised downward to 52.7 in August, and German Retail Sales contracted 3.4% in July.
The technical analysis suggests that the EUR/GBP pair is rangebound with momentum indicators entering bearish territory. Bears may test the area between 0.8555 and 0.8545, while a break below 0.8531 will confirm a multiple top and shift focus towards the July 20 and 21 lows at 0.8485 and 0.8490.