“¢ Investors looked past today’s disappointing flash Euro-zone PMI prints for January.
“¢ ECB leaves interest rates unchanged and does little to provide any fresh impetus.
“¢ British Pound remains support by Brexit optimism and might cap attempted recovery.
The EUR/GBP cross struggled to build on its intraday attempted recovery, albeit has managed to hold above the 0.8700 handle post-ECB.
With investors looking past today’s disappointing Euro-zone PMI prints, the cross recovered its early lost ground to the lowest level since Nov. 14 and for now, seems to have snapped three consecutive days of losing streak.
The uptick, however, lacked any strong follow-through following the latest ECB monetary policy update, wherein the central bank at its first meeting of 2018 left benchmark interest rates unchanged.
The announcement was widely expected and hence, did little to provide any meaningful impetus to the shared currency, though comments by the ECB President Mario Draghi, in the post-meeting presser, has the potential to infuse a fresh bout of volatility around the EUR crosses.
Meanwhile, the British Pound remains support by growing expectations of an extension of Article 50 and receding risk of a no-deal Brexit, which might further collaborate towards keeping a lid on any meaningful recovery for the cross.
Technical levels to watch
Any meaningful recovery is likely to confront immediate resistance near the 0.8760-65 region, above which the cross is likely to aim towards reclaiming the 0.8800 handle. On the flip side, sustained weakness below the 0.8700-0.8690 region is likely to find some support near the 0.8665 level, which if broken might turn the cross vulnerable to extend this month’s sharp rejection slide from the 0.9100 handle.
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