EUR/GBP bounces off weekly lows, retakes 0.9200 mark

The EUR/GBP cross built on its steady rebound from weekly lows and was last seen trading near the top end of its daily range, just above the 0.9200 round-figure mark.

The cross managed to find some support near the 0.9170 region and for now, seems to have stalled its recent pullback from the vicinity of the 0.9300 mark, or near six-month tops touched last Friday. Growing market fears of a no-deal Brexit turned out to be a key factor behind the British pound's relative underperformance against its European counterpart.

The GBP bulls largely shrugged off Wednesday's release of better-than-expected UK consumer inflation figures for August. In fact, the headline CPI fell 0.4% in August, versus consensus estimates pointing to a reading of -0.6% and rose 0.2% on a yearly basis. Meanwhile, core CPI also bettered market expectations of 0.6% and decelerated to 0.9% YoY from 1.8% previous.

Meanwhile, a subdued price action around the shared currency failed to provide any meaningful impetus, with the GBP price dynamics acting as an exclusive driver of the pair's momentum. It will now be interesting to see if the EUR/GBP cross is able to capitalize on the positive move as investors might refrain from placing aggressive bets ahead of the BoE decision on Thursday.

From a technical perspective, this week's negative move could be attributed to some profit-taking after the recent strong rally of over 400 pips and might still be categorized as a corrective slide. Hence, any subsequent slide should be seen as a buying opportunity, which, in turn, should help limit any deeper losses.

Technical levels to watch