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  • EUR/GBP consolidates the biggest jump in three weeks in a choppy range.
  • EU’ von der Leyen says Northern Ireland (NI) protocol is the only solution to ensure peace and stability.
  • EU sanctions Belarus, Fedspeak came in mixed on reflation fears.
  • German data, Brexit headlines and covid updates eyed for fresh impulse.

EUR/GBP wobbles around 0.8630, after the biggest daily jump since early May, during Tuesday’s Asian session. In doing so, the cross-currency pair struggles to justify negative headlines concerning Brexit and risk-on mood amid a quiet session.

The quote cheered US dollar weakness and upbeat mood the previous day but challenges to the smooth Brexit talks, which recently hover around Northern Ireland (NI) protocol, seem to probe the EUR/GBP bulls of late. As per the latest comments from European Commission President Ursula von der Leyen, “The Protocol is the only solution to ensure peace and stability in Northern Ireland.” “It’s our common duty with the UK to do whatever we can to reduce tensions there,” adds the bloc’s chief.

Elsewhere, the US dollar index (DXY) failed to extend Friday’s recovery moves the previous day as downbeat activity numbers from the Chicago Fed and comments from Federal Reserve Governor Lael Brainard, as well as St. Louis President James Bullard, dismissed inflation risks. However, the latest Kansas City Federal Reserve President Esther George mentioned, per Reuters, that she doesn’t dismiss the fears of an inflation surge.

It should also be noted that a partial off in the European markets and a light calendar helped the EUR/GBP bulls on Monday.

Amid these plays, S&P 500 Futures track Wall Street gains with 0.16% upside by the press time whereas the US 10-year Treasury yields remain on the back foot for the fourth consecutive day, around 1.60% white writing.

Moving on, Germany’s Q1 GDP and IFO sentiment numbers for May will be important for GBP/JPY traders but Brexit and the coronavirus (COVID-19) headlines can keep the driver’s seat.

Technical analysis

A daily closing beyond the 50-day EMA level of 0.8645 becomes necessary for EUR/GBP bulls to challenge the monthly top surrounding 0.8710.