The EUR/GBP cross failed to capitalize on Monday’s weekly bullish gap up opening and has now retreated back to 0.8800 handle.
A strong recovery move around the GBP/USD major, following previous session's slump closer to October flash crash lows, helped the cross to fill yesterday's gap higher to over two-month high level near mid-0.8800s.
The British Pound, however, remained a relative underperformer against its European counterpart as market participants keenly await for today's speech by UK Prime Minister Theresa May, which would remain continue infusing volatility around GBP crosses.
In addition to this, investors will also confront the release of UK CPI print, which is expected to have ticked-higher to an annualized pace of 1.4% for December as compared to previous month's 1.3%. From the Euro-zone, German ZEW economic sentiment index for January might also provide some impetus for short-term traders during European session.
Technical levels to watch
A follow through retracement below 0.8760 support is likely to get extended towards 0.8725-20 horizontal support, en-route 0.8700 round figure mark. On the upside, momentum above session peak resistance near 0.8820 region might continue to confront resistance near 0.8850 level (yesterday's high) above which the cross seems all set to head towards reclaiming 0.8900 handle.
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