• EUR/GBP hovers above the 0.8655 support area, after dropping nearly 0.7% this week.
• Hot Eurozone inflation numbers add pressure to the ECB to hike interest rates,
• Softer-than-expected UK CPI data has weighed moderately on the Pound

The Euro (EUR) nurses minor losses against the British Pound (GBP) on Wednesday, trading right above the 0.8655 support area, after losing nearly 0.7% so far this week. UK inflation data put some pressure on the Pound, but the Eurozone’s final Harmonized Index of Consumer Prices (HICP) has failed to support the Euro.

Eurozone HICP confirmed that yearly inflation rose to 3% in April from 2.6% in March, adding pressure on the European Central Bank to hike interest rates, in spite of the weakening economic activity. In the UK, on the other hand, consumer inflation eased beyond expectations in April, providing some leeway to the Bank of England to keep its monetary policy unchanged in June. The Pound reacted with moderate declines.

Technical Analysis: Bears eye one-week lows at 0.8645

EUR/GBP's immediate trend shifted to bearish this week, after a sharp reversal from last week's highs. The 4-Hour Relative Strength Index (RSI) sits around 39, hinting at lingering downside pressure, while the Moving Average Convergence Divergence (MACD) remains in negative territory, suggesting that recent rebounds are corrective.

Bears are pushing against the mentioned 0.8655 area, with the focus on the weekly low, near 0.8645. Further down, the target is the May 11 low, at 0.8630.

The pair confirmed the break of the 200-period moving average in the 4-hour charts, an indicator closely observed by traders, which is likely to offer significant resistance near 0.8680, together with the 38.2% Fibonacci retracement of this week's sell-off and Tuesday's high above 0.8685. Further up, the 61.8% Fibonacci retracement is coincident with the March 15 lows in the 0.8700 area.

(The technical analysis of this story was written with the help of an AI tool.)