EUR/GBP erase early gains but holds 0.7600 after German Ifo index

The EUR/GBP pair's recovery attempt to 0.7640 got sold into and the pair dropped to find support at 0.7600 handle.

The pair attempted a recovery on Wednesday from near-term oversold conditions, but the bounce was utilized by traders to initiate fresh short positions. The weakness, however, got support from slightly better than expected German Ifo Business Climate index that rose to 107.7, its highest level since Dec. 2015.

The pair on Tuesday got a double whammy from disappointing German ZEW economic sentiment and the latest 'Brexit' polls and dropped to its lowest level since early Feb. to nearly test 0.7600 round figure mark. The pair also shrugged-off strong q/q German GDP growth of 0.7% and extended its break-down momentum.

Slightly better-than-expected reading provide the EUR/GBP bulls to defend 0.7600 handle. However, renewed selling pressure, leading to a break through 0.7600 handle would open room for extension of the pair’s near-term downward trajectory.

Technical levels to watch

Below 0.7600 round figure mark support, the pair seems vulnerable to extend its depreciating move immediately towards Feb. daily closing lows support near 0.7550-45 region.

On the flip side, an encouraging business sentiment index could assist the pair to hold 0.7600 handle and stage some recovery towards 0.7665 immediate resistance. Although a follow through strength above 0.7665 could get extended but might now be capped at an important support break turned strong resistance near 0.7700 handle.