EUR/GBP spikes to fresh session tops, near mid-0.8800s post UK CPI

The EUR/GBP cross built on previous session's recovery move from three-week lows and jumped to fresh session tops near mid-0.8800s following the release of UK CPI print. 

The cross caught some fresh bids after the latest UK inflation figures fell short of consensus estimates and showed that headline CPI remained flat in June, with the yearly rate easing to 2.6% from previous month's 2.9%. 

   •  UK CPI eases to 2.6% y/y in June, misses expectations

Easing inflationary pressure was now seen holding the BOE back from taking any monetary policy action anytime soon and triggered a sharp slide in the British Pound.

Meanwhile, the prevalent bullish sentiment around the shared currency further supported the pair's strong up-move for the second consecutive session.

   •  EUR futures: rally appears well and sound, ECB begs caution

Next on tap would be the release of German ZEW Economic Sentiment Index for July, which would be looked upon for some fresh bullish impetus.

   •  German ZEW to post another modest decline in July – Danske Bank

Technical levels to watch

Immediate resistance is now pegged near 0.8880 level, above which the cross could extend the up-move back towards reclaiming the 0.8900 handle before eventually darting towards 0.8925-30 horizontal hurdle. 

On the flip side, any pull-back now seems to find immediate support near 0.8810-0.8800 region, which if broken could drag the cross back towards the mid-0.8700s area before the corrective slide gets extended towards 50-day SMA support near 0.8720 region en-route the 0.8700 handle.

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