FxWirePro: EUR/GBP recovery lacks traction, focus on ECB policy meeting for direction

EUR/GBP chart - Trading View 

EUR/GBP gained some positive traction on Monday, but upside remains capped at 21-EMA.

The pair has snapped three days of the losing streak, but recovery attempts lack traction.

Escalating bearish bias seen for the pair. Price action has slipped lower from session highs at 0.8612 to favor sellers.

Doubts over the UK’s June 21 unlock deadline dent the pound. Further, expectations that US President Joe Biden will back European Union (EU) over the Northern Ireland (NI) protocol weigh on the market sentiment. 

That said, optimistic outlook for the UK economic recovery and indications that the Bank of England could raise rates well into next year acted as a tailwind for the GBP.

On the data front, Eurozone Sentix Investor Confidence rose to 28.1 in June from 21.0 in May, beating expectations for a reading of 26.0.

The Sentix current conditions index jumped to 21.3 points in the reported month. While expectations eased from all-time highs to 35.3 points.

Upbeat Eurozone Sentix data keeps downside cushioned. The pair finds series of resistance till 55-EMA at 0.8633. Decisive break above required for upside continuation.

Focus now on the ECB meeting on Thursday. The central bank is expected to slow the current purchase in the PEPP from the current 80bn per month to some EUR 70bn per month in Q3. 

The rate outlook is expected to remain unchanged, focus shall be on new economic projections for cues on recovery.