EUR/GBP stages a goodish recovery from monthly lows

Haresh Menghani FXStreet

The EUR/GBP cross stalled its sharp reversal from yearly tops and staged a goodish recovery from three-week lows touched on Friday.

With the EUR/USD major entering a bullish consolidation phase, a weaker sentiment around the British Pound is turning out to be an exclusive driver of the pair's recovery move from monthly lows, below mid-0.8700s.

The cross was seen benefitting from a softer tone surrounding the British Pound, as market participants trimmed some of their bullish GBP bets and look forward to any fresh news/developments coming out of the much-awaited start of the Brexit negotiations.

• BoE: Will they? Should they? – BMO CM

On the economic data front, the final print of Euro-zone CPI for June remained supportive of the pair's up-move to session tops near 0.8775-80 region.

Technical levels to watch

A follow through recovery now seems to confront immediate resistance near the 0.8800 handle, above which a fresh bout of short covering could lift the cross back towards the 0.8845-50 region.

On the flip side, mid-0.8700s area now becomes an immediate support to defend, which if broken could extend the corrective slide towards 50-day SMA Support near 0.8720 region en-route the 0.8700 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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