EUR/GBP extends UK CPI-led slide, hits 7-day low

The EUR/GBP cross ran through fresh offers following upbeat UK CPI print and extended its slide further below 0.9000 handle to 7-day low.

Currently trading around 0.8960 region, the cross came under selling pressure and accelerated the downslide after UK consumer prices, as measured by CPI, printed the highest level since Nov. 2014 and came-in at 1.0% y-o-y as compared to previous month's 0.6% and 0.8% expected. 

Further downslide, however, seemed limited amid ongoing recovery in the EUR/USD major led by a broad based US Dollar weakness following Monday's dismal US manufacturing data, which dimmed prospects of an eventual Fed rate-hike move. 

Traders now look forward to this week's other key UK macro releases, including employment report and monthly retail sales data, and ECB monetary policy decision, which would help determine the next leg of directional move for the cross.

Technical levels to watch

A follow through selling pressure is likely to drag the cross immediately towards 0.8935 before the downward trajectory gets extended towards 0.8900 handle. On the upside, any recovery attempt might now confront resistance at 0.9000 psychological mark above which the momentum seems to lift the cross towards 0.9040-45 resistance area.