EUR/GBP spikes to 0.8380 after UK data, focus shifts to ECB

Following the release of disappointing UK monthly retail sales data, the EUR/GBP cross broke through early trading range and surged to session high level of 0.8383. 

The British Pound caught up with some fresh offers after a report published by the office for National Statistics (ONS) showed a larger-than-expected decline in the monthly sales at the retail level. UK monthly retail sales posted a decline of 0.9% in June as compared to 0.4% decline expected. 

Meanwhile, the EUR/GBP cross seems to have stabilized above 0.8350 and would now be looking forward to today's key event risk, ECB monetary policy decision. Although consensus is expecting a status-quo monetary policy stance, but market participant would be closely scrutinizing comments from ECB President Mario Draghi and look for cues over prospects of further monetary easing in September. 

Technical levels to watch

On the immediate upside, 0.8400-0.8420 remains strong resistance to clear, which if conquered seems to lift the pair immediately towards 0.8500 handle. On the downside, weakness below 0.8300 handle now seems to turn the pair vulnerable to break below two-week lows support near 0.8250 and head towards testing its next major support near 0.8200 handle.