EUR/GBP lacks any firm direction, consolidates in a range below 100-day SMA

The EUR/GBP cross struggles for a firm intraday direction on Tuesday and oscillates in a narrow trading band, just above the mid-0.8700s through the first half of the European session.

The Pound Sterling's  relative outperformance comes amid the upbeat report by the British Retail Consortium (BRC), which showed that like-for-like retail sales rose by 4.9% in March and the total retail spending increased by 5.1% YoY. This, in turn, is seen as a key factor acting as a headwind for the EUR/GBP cross. That said, the recent mixed signals from the Bank of England (BoE) members over the next policy move hold back traders from placing aggressive bets.

Apart from this, a strong pickup in demand for the shared currency, bolstered by rising bets for additional rate hikes by the European Central Bank (ECB) and the better-than-expected data, is seen lending support to the EUR/GBP cross. In fact, the Eurozone Sentix Investor Confidence index improves from -11.1 in March to -8.7  in April against the -9.9 expected. Furthermore, the Current Situation Index rose for the sixth straight month, to -4.3 in April from the -9.3 previous.

The aforementioned fundamental backdrop supports prospects for some meaningful upside for the EUR/GBP cross. That said, the recent breakdown and acceptance below the 100-day Simple Moving Average (SMA), along with the range-bound price action witnessed over the past week or so, warrants some caution for bullish traders. The focus now shifts to the BoE Governor Andrew Bailey's scheduled speeches on Wednesday and Thursday, which might provide a fresh impetus.

Technical levels to watch