EUR/GBP flirting with 0.8500 mark ahead of German CPI

The EUR/GBP cross stalled two days of recovery momentum from over 2-month low touched last week and has now reversed majority of its recovery gains recorded on Monday. 

Currently flirting with 0.8500 psychological mark, bid tone surrounding the British Pound, led by upbeat UK economic releases, has been the key factor driving the cross lower on Tuesday. Data released on Tuesday showed Mortgage Approvals rose 67.52K during October, BoE’s Consumer Credit rose nearly £1.62 billion during the same period, while M4 Money Supply rose 1.1% on a yearly basis and Net Lending to Individuals rose 4.9 billion, all printing better-than-expected results. 

Meanwhile, a rangebound price action around the EUR/USD major has also failed to extended any support as investors now look forward to the preliminary release of German CPI print for fresh impetus. The preliminary German consumer inflation, as measured by CPI, is expected to tick higher to 0.9% y-o-y for November as compared to 0.8% recorded in October.

Technical levels to watch

Immediate downside support is pegged at 0.8470 level below which the cross is likely to drift towards 0.8420 support area (Sept. 12 low) en-route 0.8400 round figure mark. On the upside, 0.8540 now becomes immediate resistance, above which the recovery momentum is likely to get extended towards 0.8590 level before the cross makes an attempt to reclaim 0.8600 handle.