EUR/GBP weaker around 0.8650 ahead of ECB

After yesterday’s failed attempt to recover back above 0.8700 handle, the EUR/GBP cross came under some renewed selling pressure and held closer to weekly lows ahead of ECB.

Despite of the bearish bias, the cross remained within a narrow trading band as investors keenly await for the ECB monetary policy decision. 

Although the central bank is expected to maintain status quo monetary policy stance but investors would be looking forward to a change in the central bank’s dovish tone in wake of recent data showing inflation picking-up in the region. 

Hence, ECB President Mario Draghi’s subsequent press conference would grab all the market attention and might turn out to be a key determinant of the pair’s next leg of directional move. 

Technical levels to watch

Immediate downside support is pegged near 0.8625-20 region below which the cross is likely to accelerate the slide initially towards 0.8600 handle and eventually towards 50-day SMA support near 0.8540 region. 

On the upside, momentum above session peak resistance near 0.8675-80 region is likely to assist the cross back towards 0.8700 handle, which if conquered seems to boost the pair further towards 0.8760 horizontal resistance.