EUR/GBP consolidates after failing at familiar resistance

• EUR/GBP familiar resistance capping the bulls.
• EUR/GBP has a busy week ahead.

EUR/GBP has been consolidating in North American trade, supported by the 100hourly SMA at 0.8794.  Currently, EUR/GBP is trading at 0.8802, down -0.27% on the day, having posted a daily high at 0.8848 and low at 0.8790.

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EUR/GBP has been struggling at the tops end of this range in a recovery of lows below the 0.87 handle where a strong resistance location is made up of the 21st Nov lows and multiple failures in Dec below 0.8860.

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A busy week ahead

It is a busy week for the cross this week with the Central Banks, BoE and ECB meeting. In terms of the BoE, they will note that the UK's CPI rose more quickly than expected in Nov, with headline CPI gaining 0.3% in the month, pushing the headline rate to 3.1% - a 5 ½ year high and crossing the threshold which requires BoE Governor Carnet to write a letter to the Chancellor to explain what is going on and what he will do about above-target inflation. However, the BoE is fully expected to remain on hold regardless.  The ECB is unlikely to be a big an event as the BoE and, equally, is fully expected to remain on hold. 

EUR/GBP levels

Analysts at Commerzbank explained that EUR/GBP has not registered a weekly close below its 55-week ma:

"It has sold off on Friday to the 61.8% retracement of the move seen this year at 0.8697, the strong rebound from here suggests it is reluctant to head lower at this juncture and we would allow for a rebound. 

A close below here targets the 0.8530/78.6% retracement of the move seen this year. Near-term rallies should find decent resistance at 0.8871 55-day ma and then the 0.8933 resistance line," the analysts added.