EUR/GBP looks to close below 0.8800 on broad euro weakness

The EUR/GBP pair closed the first two days of the week in the positive territory and gained more than 100 pips during that period. With the shared currency coming under a renewed selling pressure on Wednesday, the pair lost its traction and dropped below the 0.8800 handle. As of writing, the pair was trading at 0.8780, losing 0.55% on a daily basis.

Earlier in the day, the data published by the UK's Office for National Statistics showed that the annual inflation, as measured by the Consumer Price Index (CPI), edged lower to 1.5% in March from 1.7%. This reading came in line with the market expectation and helped the GBP stay resilient against its peers.

Meanwhile, regarding the coronavirus outbreak, British Foreign Secretary Raab said that the UK was starting to come through the peak and helped the UK's FTSE 100 Index end the day with a gain of more than 2%.

EUR remains on the back foot on Wednesday

On the other hand, ahead of Thursday's critical meeting of EU leaders to establish the European recovery fund, the shared currency is struggling to find demand. Reflecting the broad-based euro weakness, the EUR/USD pair is down 0.47% on the day.

Moreover, the European Commission on Wednesday announced that the Consumer Confidence Index in the euro area slumped to -22.7 in April's preliminary reading from -11.6 in March and missed analysts' estimate of -19.6 by a wide margin.

On Thursday, the IHS Markit's preliminary Manufacturing PMI data for Germany, the UK and the eurozone will be looked upon for fresh impetus. Previewing the UK's PMI data and the potential market reaction, "only in case of figures beating expectations, preferably holding up at March´s levels, the pound has room to rise,” FXStreet analyst Yohay Elam said.

Technical levels to watch for