• Jumps back to dovish BoE-led swing highs.
• Flash EZ GDP/UK CPI awaited.
• Draghi/Carney speech also in focus.
The EUR/GBP cross continued gaining positive traction through the early European session and was seen building on its strength above the 0.8900 handle.
The cross extended last week's recovery move from sub-0.8800 level and was seen benefitting from some persistent GBP selling bias. The latest UK political developments, wherein reports suggested that a significant number of Conservative MPs were ready to sign a letter of no confidence attracted some fresh selling around the British Pound and has been one of the key factors driving the cross higher.
Adding to this, a modest pickup in demand for the shared currency, with the EUR/USD major jumping back to the 1.1700 neighborhood, further collaborated to the pair's strong up-move back closer to early Nov. swing highs touched in the aftermath of dovish BoE rate hike move.
Traders now brace of important macro data, which includes flash Euro-zone GDP print, German ZEW Economic Sentiment and the latest UK inflation figures, due for release in a short while from now. Also in focus would be the ECB's Central Bank Communications Conference, where comments by the ECB President Mario Draghi and the BoE Governor Mark Carney should also infuse some volatility in the cross.
Technical levels to watch
A follow-through buying interest beyond 0.8930 level might continue to lift the cross towards 0.8970-75 intermediate hurdle ahead of the key 0.90 psychological mark.
On the flip side, the 0.8900 handle now becomes an immediate support to defend, which if broken could accelerate the fall back towards 0.8855 horizontal support.
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