The fact is that the previous data on the eurozone producer price index was downwardly revised to 5.5% from 5.9%. What is more, the indicator’s growth rate slackened to 1.0%. Economists had expected a less significant slowdown to 2.1%. It means that inflation will also slump.That is why it is highly possible that the ECB will cut the key interest rate by the end of the year. Against the backdrop, the euro started actively losing value, thus affecting the pound sterling.However, traders should keep in mind that the US dollar is becoming even more overbought. That is why its upward potential is limited. Investors will search for any reason for the downward correction. Even insignificant information may spur a sharp reversal.On the trading chart, we see that the euro/dollar pair approached the resistance level of 1.0800, which caused a drop in the volume of long positions. As a result, the upward cycle slackened and the price reversed.If the pair settles below 1.0700, the euro will slide deeper to a new low of the correctional movement. However, if the euro returns to 1.0800, it may resume rising. This will be considered a new upward cycle.Meanwhile, the pound/dollar pair reached the resistance level of 1.2550 amid the rapid upward movement. However, the price dropped just after it touched the resistance level. As a result, the volume of short positions surged and the price decreased to 1.2450.Under the current conditions, a sharp reversal of the pound sterling violated the recovery process and led to a correction. To confirm the scenario, the pair should settle below 1.2400. However, if the pound sterling exceeds this level, it may resume gaining in value and return to 1.2500.

https://www.instaforex.com

FX Analytics - https://www.instaforex.com/forex_analytics
Forex Calendar - https://www.instaforex.com/forex_calendar
Forex TV from InstaForex - https://www.instaforex.com/instaforex_tv

Forex charts - https://www.instaforex.com/charts
Instant account opening - https://www.instaforex.com/fast_open_live_account
Forex Trading Contests - https://www.instaforex.com/forex_contests

List of official InstaForex blogs:
https://www.facebook.com/instaforex
https://www.instagram.com/instaforex/
https://twitter.com/InstaForex

#forex_news #european_session #instaforex_tv

00:00 INTRO
00:10 EUROZONE PRODUCER PRICE INDEX, Y/Y
00:35 ECB KEY INTEREST RATE:
00:51 QUOTES
01:11 EUR | USD
01:45 GBP | USD