EUR/GBP reverses majority of Tuesday’s UK CPI-led losses

Having posted fresh two-week lows below mid-0.8600s, the EUR/GBP cross managed to catch fresh bids and jumped to fresh session peak during early NA session.

Currently trading around 0.8680-85 region, the cross has now reversed majority of previous session's sharp slide. The British Pound saw some strong buying interest on Tuesday on higher-than-expected UK CPI print. However, strong bid tone surrounding the shared currency, in wake of Emmanuel Macron's strong performance in the first French Presidential debate, helped limit the downslide.

Buy the dips in EUR/GBP – Danske Bank

In absence of any major fundamental drivers, in-terms of any market moving economic releases, the current leg of up-move for the cross could be solely attributed to the GBP/USD pair's reversal from the key 1.2500 psychological mark. Meanwhile, a consolidative price-action around the EUR/USD major was further supportive of the pair's ongoing recovery move from the lowest level since March 7.

Technical levels to watch

A follow through recovery beyond 0.8690 level is likely to accelerate the up-move towards 0.8725-30 resistance before the cross makes a fresh move towards testing an important hurdle near 0.8775-80 region.

On the downside, 0.8660 level now becomes immediate support to defend, which if broken decisively has the potential to continue dragging the cross, even below 0.8640 strong horizontal support, towards the 0.8600 handle.