EUR/GBP struggling for direction at 0.8350

The EUR/GBP cross had a muted reaction to the release of better-than-expected German Ifo Business climate index and remained stuck in a narrow trading band around mid-0.8300s.

Te pair remained unmoved after German IFO - Business Climate index came in at 108.3 for July and was well above forecasts of 107.5. Moreover, the pair in the near-term seems to have been confined within a broad trading range between 0.8400-0.8250 region.

The pair continues to struggle for direction as both the British Pound and the shared currency continue to be weighed down on expectations of additional stimulus by BOE and ECB respectively. 

However, in a week that is overloaded with key event risks, especially the release of Q2 GDP from UK and Euro-zone, and the very important FOMC meeting, traders would be in a better position to determine near-term direction for the pair.

Technical levels to watch

On the immediate upside, 0.8400 region remains immediate strong resistance to watch for, which if conquered seems to boost the pair immediately towards 0.8470 (July 14 high) ahead of 0.8500 psychological mark.

Meanwhile on the downside, weakness below 0.8300 handle, and a subsequent break below 0.8250 (July 14 swing lows), now seems to open room for extension of the pair's near-term corrective move towards 0.8188 (June 27 low).