EUR/GBP turns back above 0.8300 handle ahead of EU CPI

After an initial drop to nearly retest Thursday's swing lows, the EUR/GBP cross has managed to erase early losses and move back above 0.8300 handle to currently trade absolutely flat around 0.8330 region.

Extending its reversal from multi-month highs, the pair remained well offered on Thursday and fell sharply to a two-week low after BOE decided to hold its monetary policy steady. The pair found some support at lower levels at the central bank left doors open for additional stimulus at its August meeting. 

Friday's drop back to 0.8260 was again bought into as markets now look forward to the final print of Euro-zone CPI and BOE Governor Mark Carney's speech for fresh impetus over near-term direction for the cross. Nevertheless, the pair is still seems to be headed for its first weekly decline after last month's historic Brexit referendum.

Technical levels to watch

From current levels, recovery momentum above 0.8335-40 horizontal resistance is likely to get extended towards 0.8400 round figure mark, above which the pair could easily rise to 0.8445-50 resistance. On a convincing break above 0.8445-50 resistance the cross seems all set to resume its near-term bullish momentum and head back towards recent daily closing highs resistance near 0.8580-0.8600 region.

Meanwhile on the downside, weakness back below 0.8260-50 immediate support now opens room for a extension of the pair's near-term corrective move towards testing its next major support near 0.8200 handle.