EUR/GBP back into Wednesday's midpoint near 0.8670 as Euro contemplates downside

• The EUR/GBP is strung along the midrange after dipping into a low of 0.8660 on Wednesday.
• The Euro's consolidation range against the Pound Sterling remains intact as the 0.8700 handle proves elusive.
• UK inflation held over expectations, ECB's Lagarde notes high wages.

The EUR/GBP declined from the day's opening bids of 0.8680 into an intraday low of 0.8660 before rebounding into 0.8670 as the Euro (EUR) twists into the middle against the Pound Sterling (GBP).

Uk Consumer Price Index (CPI) inflation came in above expectations, holding steady at 6.7% in for the year into September versus the forecast decline to 6.5%. Month-on-month CPI inflation saw a slight uptick into 0.5% from August's 0.4%.

UK Annualized Core CPI inflation (excluding the volatility of food and energies prices) likewise came in above expectancy, with September's figure printing at 6.1% compared to August's 6.2%, against the median forecast of 6.0%.

On the EU side, the Harmonized Index of Consumer Prices (HICP) for September printed as-expected, confirming the previous number and printing at 0.3%.

European Central Bank (ECB) President Christine Lagarde hit newswires on Wednesday, noting that underlying inflation remains quite strong, with wage growth remaining "historically high". Despite the inflationary concerns, ECB President Lagarde noted that worsening demand remains a critical downside risk.

ECB’s Lagarde: Underlying inflation is still strong, wage growth is historically high

EUR/GBP Technical Outlook

The EUR/GBP pair is drifting towards the 200-day Simple Moving Average (SMA) near the top-end of medium-term consolidation at the 0.8700 handle, and the major price level is set to remain a significant cap for the Euro-Pound pairing if bidders aren't able to extend from the last bullish bounce from 0.8620.

The EUR/GBP initially fell into 0.8525 in June, and has struggled to develop a meaningful trend ever since, bouncing between 0.8525 and 0.8700.

A bullish trend correction will see the EUR/GBP set for a challenge of late April's swing high into 0.8850.

EUR/GBP Daily Chart

EUR/GBP Technical Levels