EUR/GBP clings to modest gains above 0.8700 mark, lacks follow-through

EUR/GBP stages a modest bounce from multi-week lows support near the 0.8680-75 region.
The GBP witnessed some selling during the early European session provided a goodish lift.
The German court ruling on Tuesday continued weighing on the euro and capped the upside.
The EUR/GBP cross jumped to fresh session tops, around the 0.8735 region in the last hour and recovered a major part of the previous day’s negative move.

The cross continued showing some resilience below the 0.8700 round-figure mark and once again managed to attract some buying near multi-week lows support, around the 0.8680-75 region held since mid-April.

The cross broke out of its daily consolidative trading range and gained some positive traction during the early European session following the release of worse-than-expected UK Construction PMI.

This comes amid the ever-increasing number of coronavirus cases and related deaths in the UK, which coupled with increasing prospects for an extended lockdown took its toll on the British pound.

Meanwhile, the prevalent bearish sentiment surrounding the shared currency failed to impress bullish traders or assist the cross to build on the intraday positive move further beyond 200-hour SMA.

The top German court ruling on Tuesday fueled worries over the country’s participation in the stimulus program aimed at cushioning the economic blow from the coronavirus and continued weighing on the euro.

Meanwhile, the European Commission, in its latest economic forecasts for the region, warned about the deepest economic downturn in history, which might further contribute towards capping the cross.

Meanwhile, the cross has been confined in a broader trading band around the very important 200-day SMA over the past one month or so, warranting some caution before placing fresh directional bets.

Hence, it will be prudent to wait for a sustained break in either direction before positioning aggressively for the near-term trajectory as the focus now shifts to the BoE decision on Thursday.

Technical levels to watch
Today last price 0.8719
Today Daily Change 0.0005
Today Daily Change % 0.06
Today daily open 0.8714

Daily SMA20 0.8739
Daily SMA50 0.8831
Daily SMA100 0.865
Daily SMA200 0.8725

Previous Daily High 0.8765
Previous Daily Low 0.8691
Previous Weekly High 0.8796
Previous Weekly Low 0.8671
Previous Monthly High 0.8911
Previous Monthly Low 0.8671
Daily Fibonacci 38.2% 0.8719
Daily Fibonacci 61.8% 0.8737
Daily Pivot Point S1 0.8681
Daily Pivot Point S2 0.8649
Daily Pivot Point S3 0.8607
Daily Pivot Point R1 0.8756
Daily Pivot Point R2 0.8797
Daily Pivot Point R3 0.883