EUR/GBP deflates from 0.8550 ahead of German CPI

EUR/GBP has faded the initial spike to daily tops near 0.8550 following the softer tone in the single currency.

EUR/GBP looks to German data

The European cross is advancing for the second consecutive session so far, extending the bounce off multi-week lows in the 0.8460/65 band seen last week.

The cross has come under renewed selling pressure as of late in response to the better sentiment surrounding the Sterling, particularly after Theresa May’s speech and the Supreme Court ruling, all mitigating concerns over a ‘hard Brexit’ scenario.

On the data front, EC’s Consumer Confidence improved a tad to -5.0 for the current month, while Business Climate deteriorated to 0.0 during the same period. Later in the session, advanced German inflation figures for the current month are due, with consensus expecting consumer prices to have risen at an annualized 2.0%.

In the UK, the BoE’s monetary policy meeting and the Quarterly Inflation Report will take centre stage on Thursday.

EUR/GBP key levels

The cross is now gaining 0.19% at 0.8536 facing the next hurdle at 0.8549 (high Jan.30) ahead of 0.8611 (20-day sma) and then 0.8654 (100-day sma). On the downside, a break below 0.8464 (high Jan.27) would expose 0.8446 (low Jan.3) and finally 0.8413 (200-day sma).