EUR/GBP holds steady above 0.8500 mark, traders eye German CPI for fresh impetus

• EUR/GBP gained some positive traction on Monday, through lacked follow-through buying.
• The recent hawkish remarks by the ECB policymakers continued lending support to the euro.
• Rising bets for a jumbo BoE rate hike, a weaker USD benefitted sterling and capped the upside.

The EUR/GBP cross attracted some dip-buying near the 0.8485 region on the first day of a new week and reversed its modest losses recorded on Friday. The cross maintained its bid tone through the early European session and was last seen trading near the daily high, around the 0.8515 region.

The shared currency continued drawing support from the recent hawkish comments by the European Central Bank policymakers, hinting at a probable rate hike in July. On the other hand, the UK-EU impasse over the Northern Ireland protocol acted as a headwind for the British pound and offered additional support to the EUR/GBP cross.

That said, rising bets for a jumbo interest rate hike by the Bank of England, along with the prevalent US dollar selling bias, underpinned sterling and kept a lid on any further gains for the EUR/GBP cross. Investors also seemed reluctant to place aggressive directional bets ahead of the key European Union summit starting this Monday.

Apart from this, traders will take cues from the flash German consumer inflation figures, which might influence the euro and provide some meaningful impetus to the EUR/GBP cross. This makes it prudent to wait for strong follow-through buying before positioning for any further intraday appreciating move for the EUR/GBP cross.

Technical levels to watch