EUR/GBP stuck in a range around 0.88 handle, awaits BOE for fresh impetus

The EUR/GBP cross swung between a low of 0.8780 and highs of 0.8807 but struggled for a firm direction as investors remained on the sideline ahead of the BoE monetary policy decision.

The cross found some support from disappointing UK retail sales data, which added to Wednesday's softer UK wage growth and fueled worries over real economic growth of the British economy. 

   •  UK: Retail sales highlights growth risks trump inflation fears - ING

Meanwhile, the release of Euro-zone April trade surplus data for April, at €19.6 billion as compared to €22.0 billion recorded in March, did little to provide any additional boost, with the cross holding near the top end of daily trading range. 

Moreover, investors also seemed reluctant and preferred to wait for the BOE announcement before initiating any fresh positional trade, which has eventually led to a range-bound/subdued price-action around the cross.

With the BoE widely expected to keep its monetary policy unchanged, amid prevailing political uncertainty and the impending Brexit negotiations, focus would be on the BoE Governor Carney and Chancellor of the Exchequer Hammond's speech later during the annual Mansion House event.

   •  UK: Post BoE, Mansion House event to garner attention - TDS

Technical levels to watch

A follow through up-move beyond 0.8815-20 region is likely to lift the cross back towards yearly tops resistance 0.8850-60 zone, above which the momentum could get extended towards the 0.8900 handle.

On the downside, a convincing break below 0.8780 level, leading to a subsequent drop below 0.8765 level (yesterday’s low), could accelerate the corrective slide towards 0.8730-25 intermediate support en-route the 0.8700 handle.