EUR/GBP inching back closer to Monday’s multi-week tops

The EUR/GBP cross continued gaining traction and traded with bullish bias for the third consecutive session, inching back closer to multi-week tops touched on Monday.

Currently hovering around 0.8660 region, the cross was seen building on to its strong recovery move from 0.8400 neighborhood, and a subsequent break-out momentum above 100-day SMA strong hurdle near the 0.8600 handle. Renewed Brexit worries, following the House of Lords vote to amend the Brexit bill, added on to persistent bearish sentiment surrounding the British Pound and has been a key factor driving the cross higher.

The cross on Tuesday traded in positive territory for seventh trading session, in the previous eight, and the bid tone remained unabated despite of looming political uncertainty, ahead of the Presidental elections in France, and disappointing German factory orders data. In fact, the total value of new purchase orders placed with manufacturers during January contracted more-than-expected and came-in to show a decline of 7.4% as compared to -2.7% expected. The data did little to hinder the pair's well-established bullish trajectory, albeit has failed to lift it beyond yesterday's nearly 1-1/2 month peaks resistance near 0.8670 level. 

Next on tap would be the release of Halifax HPI from UK, followed by the final Euro-zone GDP print, and would be looked upon for some short-term trading impetus.

Technical levels to watch

Bulls would be eying for a decisive move through 0.8670 level, above which the cross seems all set to aim towards reclaiming 0.8700 handle before heading towards its next resistance near 0.8725 level. On the downside, a follow through retracement below 0.8640-35 immediate support is likely to accelerate the profit taking slide towards 0.8625 ahead of 100-day SMA strong support near 0.8605-0.8600 region.