EURGBP is virtually unchanged from its opening price today. The currency pair is trading higher at 0.8921, up from where it opened at 0.8913. While the currency pair is currently trading within a tight, 14-pip range, we could soon see some volatility when UK data comes out.
At 7:00 am GMT, the UK CPI report for April will be released. The forecast is for a 0.9% uptick in consumer prices from last year. Typically, better-than-expected CPI data has a bullish effect on the currency. This means that EURGBP could trade lower if the report comes out higher. On the other hand, EURGBP may trade higher if it misses expectations.
On the 1-hour chart, it can be seen that despite the recent downtick on EURGBP, the uptrend is still intact. This is evidenced by the rising trendline (from connecting the lows of May 11, May 12, May 14, and May 19) which the currency pair is currently testing. There have already been a few reversal candles on the trendline which could suggest that EURGBP may soon retest this week’s highs at 0.8956.
However, it’s worth pointing out that the currency was rejected twice at that high. Consequently, this has allowed for a double top chart pattern to form. When you enroll in our free forex trading course, you will learn that this is considered as a bearish reversal indicator. And so, a strong close below 0.8900 would not only invalidate the rising trendline but also the neckline support. It could trigger a sell-off to 0.8830 where the currency pair bottomed on May 14.