EUR/GBP holds steady below 0.8600 mark, moves little post-Eurozone CPI
- EUR/GBP has been struggling to find acceptance or build on momentum beyond the 0.8600 mark.
- COVID-19 jitters, dovish BoE acted as a headwind for the British pound and extended some support.
- Bulls seemed rather unimpressed by mostly in line flash Eurozone consumer inflation figures for June.
The EUR/GBP cross surrendered its modest intraday gains and was last seen hovering near the lower end of its daily trading range, around the 0.8590-85 region.
The cross gained some positive traction during the early part of the trading action on Wednesday, albeit continued with its struggle to capitalize on the move beyond the 0.8600 round figure. The shared currency was pressured by the prevalent bullish sentiment surrounding the US dollar, which, in turn, capped any meaningful upside for the EUR/GBP cross.
On the other hand, worries about the spread of the more contagious Delta variant of the coronavirus, along with the dovish Bank of England acted as a headwind for the sterling. This was seen as the only factor that extended some support to the EUR/GBP cross and helped limit any meaningful corrective slide, at least for the time being.
On the economic data front, the final version of the UK GDP showed that the economy contracted by 1.6% during the first quarter of 2021, slightly higher than 1.5% anticipated previously. Separately, the flash version of the Eurozone CPI figures matched market expectations and did little to provide any impetus to the EUR/GBP cross.
From a technical perspective, the EUR/GBP cross, so far, has failed to make it through a resistance marked by a two-month-old descending trend-line resistance. A sustained move beyond will be seen as a fresh trigger for bullish traders and allow bulls to aim to test the next relevant hurdle near the 0.8640-50 supply zone.
Technical levels to watch