EUR/GBP struggling to extend its up-move beyond 0.8500, retraces to 0.8480

The shared currency maintained its outperformance against its British counterpart with the EUR/GBP cross once again hitting 0.8500 handle and rise to nearly one-month high level before retracing back to currently trade around 0.8480 region. 

The British Pound remained under selling pressure, while the common currency is seen benefitting from mostly in-line with estimates German industrial production and better-than-expected release of composite Sentix investor confidence index for the month of August. 

After a brief pause on Friday the cross resumed its bullish traction and is now extending its sharp rebound from 20-day SMA region, building on to its strong gains after BOE surprised markets by expanding its Asset Purchase Facility. 

Given the increasing prospects of further monetary easing by BOE, sterling might continue to remain suppressed and hence, limit any immediate downslide for the EUR/GBP cross.

Technical levels to watch

On a sustained strength above 0.8500 handle, and a subsequent up-move beyond 0.8535 intermediate resistance, seems to pave way for continuation of the pair's near-term upward trajectory towards its next major resistance near 0.8580 region.

Meanwhile on the downside, 0.8460 region now seems to have emerged as immediate support, below which the pair is likely to drift back to 20-day SMA support near 0.8400-0.8395 region before extending its corrective move towards 0.8345-40 horizontal support.