EUR/GBP remains capped below 0.85 mark, erases tepid recovery gains

The EUR/GBP cross failed to build on early recovery move and is now headed back to multi-week lows touched during Asian session on Monday.

Currently trading around 0.8470-65 band, unchanged for the day, the cross has now reversed all of its tepid recovery gains closer to the 0.85 psychological mark. Ahead of this week's crucial French Presidential election, investors refrained from buying the shared currency and has thus, failed to assist the cross to register any meaningful recovery from its lowest level since Feb. 27.

Meanwhile, a mildly positive sentiment surrounding the British Pound, with the GBP/USD major holding comfortably near daily peak, further collaborated towards capping the cross.

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European markets were closed in observance of Easter Monday and hence, holiday-thinned liquidity conditions could trigger some irregular and unusually volatile price-action.

Technical levels to watch

Bears would be eyeing for a break through 0.8460 level (session low), below which the cross is likely to accelerate the slide towards 0.8425 horizontal support ahead of yearly lows support near 0.8400 region.

On the upside, 0.8490-0.8500 region now seems to have emerged as immediate resistance, which if cleared decisively is likely to trigger a short-covering bounce towards 0.8530-35 horizontal resistance ahead of 0.8550-55 resistance area.