Closed in NY at $1.5957, with rate seen coming off its late recovery extension highs of $1.5985 after risk was given a late NY boost on rumours that Chinese GDP would come in strong. This corrective pullback extended to $1.5948 into early Asia before recovering with EUR/USD to $1.5969 ahead of the China data release. The 8.1% headline figure came in below the forecast 8.4% , and more significantly below the rumoured 9.0% level, dented risk appetite and dropped cable back to $1.5938. Recovery efforts remained below $1.5950 as market awaited the European market to open. EUR/GBP, which had been driven to a high in NY of stg0.82695, after rate had posted lows of stg0.8227 earlier in the European morning, was held between stg0.8258/0.82675 leaving cable to track EUR/USD moves. Support seen into $1.5830 (76.4% $1.5813/85 and dip low ahead of $1.5985), a break to open a deeper move toward $1.5915/00 ahead of $1.5890/80. Resistance $1.5985, stronger at $1.6000/10. UK PP data due at 0830GMT the domestic focus ahead of US CPI at 1230GMT.
EasyForexNews Research Team