FXStreet (London) - Despite an early reaction to UK CPI data which saw spot climb to post a high at 0.8008, EUR/GBP has been testing the bottom of its daily range and is presently trading at lows around 0.7984 support by the 1H 50 SMA.

EUR/GBP Bounce led by UK CPI

This morning saw UK Core CPI miss expectations at 1.6%/1.7% YoY, and 1.5%/1.7% CPI YoY. Elsewhere the Retail Price Index also missed expectations and declined from previous in both YoY and MoM. The initial reaction was to send spot to post a daily high at 0.8008, but ultimately it was unable to keep its head above the round number and retraced.

EUR/GBP Technicals

Following a respective high and low at 0.8011 and 0.7982 , EUR/GBP is currently trading at 0.7985, down -0.08% on the day. Looking to a 4H chart we can see that a larger downtrend has been in play since the start of the month and despite the recent bounce, a retest of the 0.7960 June 16 Low could be at play. On a 4H chart we can see that price action is presently offered support by the 20 WMA.

Meanwhile daily RSI sits at 23.38, in neutral territory and 2-Standard Deviation Volatility Bandwidth is at 187 pips and expanding on a daily chart.

EUR/GBP Levels and Patterns

Current price is 0.7985, with resistance ahead at 0.7990 (Hourly 20 EMA), 0.7993 (Daily Open), 0.7996 (Yesterday's High), 0.8006 (Daily Classic R1) and 0.8011 (Daily High). To the downside we see next support at 0.7982 (Monthly Low), 0.7982 (Weekly Low), 0.7982 (Annual Low), 0.7982 (YTD Low) and 0.7982 (Daily Classic PP).

Looking to candlestick patterns, we can see a Hammer formation on the 4-hour chart .

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