EUR/GBP turns flat at 0.8545, bullish bias remains

After an initial retracement to 0.8517, the EUR/GBP cross recovered to currently trade absolutely flat around Tuesday's settlement price at 0.8545 level.

A bout of short-covering around the British Pound, which triggered a corrective move in the EUR/GBP cross, seems to have run out of steam. Meanwhile, persistent selling pressure around the greenback is helping the shared currency to hold on to its gains and maintain its outperformance against the British Pound. 

An empty economic docket is unlikely to provide any fresh impetus while sterling might derive some momentum from the BoE’s Agents’ Summary of Business Conditions and might provide immediate momentum play for short-term traders.

Technical levels to watch

From current levels, the ongoing bullish momentum is likely to get extended towards post-Brexit daily closing high resistance near 0.8580 region, above which the cross is likely to aim immediately towards 0.8617 (July 6 high) before extending its upward trajectory towards August 2013 swing high resistance near 0.8650 region.

Meanwhile on the downside, 0.8500 psychological mark might continue to act as immediate support. Failure to hold this immediate support, and a subsequent drop below weekly lows support near 0.8465-60 region, would trigger a near-term corrective move, which might drag the cross back towards testing 0.8400 round figure mark support (20-day SMA region).