Forex: EUR/GBP retracing losses after UK housing

As the market approached the release of UK housing prices, the EUR/GBP weakened from 0.8670 area to as low as 0.8638 by the time of the publication. UK Halifax House Prices dropped -0.2% in January, as expected. 3M/YoY data rose from -0.3% to 1.3%, not as high as the 1.5% expected.

From 0.8638, the cross is bouncing and retracing its losses, now back to 0.8660, still -0.18% lower on the day. Earlier, the UK BRC Shop Price Index rose 0.6% in January (MoM), at a lower pace than December's 1.5% rise.

“The Elliott wave count on the daily is suggesting a pullback to the 0.8425/00 region (50% retracement of the move seen this year), wrote Commerzbank analyst Karen Jones, wary of a correction lower The daily RSI has diverged and we are wary of a correction lower, but unable to rule out a move to 0.8800/30 (78.6% retracement of the move down from 2011 and the October 2011 high) prior to this being seen.