EUR/GBP remains capped under 0.8300 amid Russo-Ukraine war pessimism ahead of key risk events later this week

• EUR/GBP saw a modest rebound in thin trading conditions on Monday but remained capped under 0.8300.
• The negative tone to recent Russo-Ukraine news/commentary suggests a lasting euro rebound remains unlikely at this time.
• Central bank speak and flash PMIs will be in focus later this week.

EUR/GBP saw a modest rebound in thin trading conditions on Monday, with European markets closed for the Easter holidays. Though at current levels in the 0.8280s, the pair is currently trading with on the day gains of about 0.2%, it was unsurprisingly unable to push back to the north of the 0.8300 level, around which key resistance in the form of late March/early April lows reside.

The negative tone to Russo-Ukraine news/commentary over the weekend and on Monday and further upside in global energy prices suggest that any rebound above 0.8300 would have been short-lived. In recent weeks, the euro has been an underperformer amid fears that a more protected conflict in Ukraine means a greater risk of stagflation in the Eurozone.

The hangover from last week’s not as hawkish as expected ECB meeting is also likely still weighing on EUR/GBP and has seen some betting on a return to annual lows in the 0.8200 area. ECB President Christine Lagarde and BoE Governor Andrew Bailey are both speaking at high-profile IMF/World Bank events this week, and their remarks will be closely scrutinised by EUR/GBP traders.

Friday’s release of flash Eurozone and UK PMI survey data will also provide a timely indicator as to the performance of their respective economies this month as businesses adjust to recent geopolitical events and the subsequent impact on global supply chains and commodity markets. Proper FX flows will be back on Tuesday with the return of European market participants to the fray. For now, it's probably a good bet for EUR/GBP to remain under 0.8300.