The buck was unable to break the 1.4250 level but EUR/GBP did break below 0.8720. UK inflation data spiked earlier today and has GBP bears on the run for fear the BOE will drain the punch-bowl. My guess is that the inflation rise was mostly base-effects as a year ago we were on the cusp of a deflationary abyss after the implosion of Lehman and collateral damage that caused around the world. We saw a bit rise in Eurozon inflation in December as well, but few think it is real…
If looking to fade EUR weakness, be nimble. A close below the 200-day moving average at 1.4290 today could change the market’s mindset. Range-trading could be out and EUR downtrend could be in…
