EUR/GBP sticks to goodish recovery gains, around 0.8580 post-German CPI

   “¢   A goodish pickup in the shared currency prompts some aggressive short-covering.
   “¢   The GBP consolidates recent gains led by Brexit optimism and remains supportive.
   “¢   The intraday positive mood seemed unaffected by today’s mixed German CPI prints.

The EUR/GBP cross built on its goodish intraday up-move and is currently placed at the top end of its daily trading range, around the 0.8580 region.  

With investors still digesting the latest optimism over a possible delay to the fast-approaching Brexit deadline on March 29, the British Pound was seen consolidating recent gains and eventually helped the cross to stall its recent bearish trajectory.

This coupled with a goodish pickup in the shared currency provided an additional boost rather prompted some aggressive short-covering move and assisted the cross to recover a major part of the overnight slump to the lowest level since May 2017.  

The intraday bullish sentiment seemed rather unaffected by today’s mixed German consumer inflation figures, showing that the headline CPI is estimated to rise 0.5% m/m in January as compared to market expectations for a 0.6% m/m rise.

A slight disappointment was largely offset by hotter than expected yearly price rise, coming in at 1.6% as against 1.5% expected and 1.4% previous, and did little to provide any meaningful impetus to the common currency.  

However, it would be prudent to wait for a strong follow-through up-move to see if the recovery is led by some genuine buying or is solely driven by short-covering amid highly oversold conditions on hourly/daily charts.

Technical levels to watch