US DATA: Trend Decline In Official China Holdings Of Treasuries Slowed In 2H25

• RES 4: 0.8865 High Nov 14 and a bull trigger   
• RES 3: 0.8840 High Nov 20
• RES 2: 0.8818 High Nov 26
• RES 1: 0.8802 High Dec 2 and a key near-term resistance
• PRICE: 0.8775 @ 16:31 GMT Dec 17
• SUP 1: 0.8721 Low Dec 9
• SUP 2: 0.8706 76.4% retracement of the Oct 8 - Nov 14 bull leg
• SUP 3: 0.8670 Low Oct 21   
• SUP 4: 0.8656 Low Oct 8 and a key support  

The bull cycle in EURGBP that started on Dec 9 highlights a possible reversal of the corrective phase between Nov 14 - Dec 9. Key short-term support has been defined at 0.8721, the Dec 9 low. A break of this level would signal scope for a deeper retracement, towards 0.8706, a Fibonacci retracement. Initial firm resistance to watch is unchanged at 0.8802, the Dec 2 high. Clearance of this hurdle would be a bullish development.         

• The ECB has received a reasonable amount of new information on HICP inflation since its last meeting although it’s unlikely to have materially altered its outlook.
• Headline HICP inflation has modestly cooled since September (from 2.24% Y/Y to 2.10% in Oct and 2.14% in today’s final November data) whilst core has firmed slightly (from 2.35% to 2.37% in Oct and 2.41% in Nov). Headline was trimmed very slightly from 2.16% in the flash release whilst core was completely unchanged at 2.41%.
• Further within the details, services inflation accelerated to 3.47% Y/Y in November from 3.24% in September for its fastest since April, a little higher than consensus but mostly outweighed by core goods inflation undershooting at 0.55% Y/Y.
• The final November report confirmed as generally expected that package holidays had played a role in the further services acceleration, jumping from 0.91% to 4.42% Y/Y in November. Other travel-related categories were more mixed, with accommodation firming from 3.14% to 3.41% but airfares swinging from 1.66% in Oct to -2.74% in Nov (national level data were unclear on the extent to which this reversed).
• As for more recent 3M/3M trend rates, core inflation momentum was 2.35% annualised in November, a pullback from 2.62% in October to leave it unchanged from the 2.35% the ECB had seen for September ahead of the last meeting (a figure that currently shows as 2.31% in the latest vintage). Services momentum has firmed on net though, at 3.36% in Nov after 3.59% in Oct and 2.89% in Sept. 

• RES 4: 1.3527 High Oct 1    
• RES 3: 1.3471 High Oct 17  
• RES 2: 1.3456 High Dec 16
• RES 1: 1.3452 61.8% retracement of the Sep 17 - Nov 4 bear leg
• PRICE: 1.3404 @ 16:23 GMT Dec 17
• SUP 1: 1.3312 Low Dec 17
• SUP 2: 1.3290 50-day EMA
• SUP 3: 1.3180 Low Dec 2 
• SUP 4: 1.3125 Low Nov 26      

A bull cycle in GBPUSD remains intact and for now, Wednesday’s sell-off is considered corrective. A fresh cycle high on Tuesday reinforces the bull theme. Attention is on 1.3452 (pierced), 61.8% of the Sep 17 - Nov 4 bear leg. A clear break of this hurdle would strengthen a bull theme and open 1.3527, the Oct 1 high. Initial firm support is 1.3290, the 50-day EMA. A breach of this EMA would highlight a possible reversal.