EUR/GBP chart - Trading View
EUR/GBP has erased most of the day's gains and has slipped back into the red as bulls struggles to extend bounce off trendline support.
The pair was trading 0.10% lower on the day at 0.8485 at around 10:45 GMT, down from session highs at 0.8518.
Hawkish comments from BoE officials over the weekend helped revive demand for the British pound.
BoE Governor Andrew Bailey signalled an imminent interest rate later this year. The money markets now fully price in a 25bps BoE rate hike in December.
UK-German 10-year bond yield differential hit highest since mid-2016 after ECB conveyed a dovish outlook. This widening yield differential also acts as a headwind for the EUR/GBP cross.
Further, on the data side, German ZEW Economic Sentiment Index fell to 22.3 from 26.5 previous and missed consensus estimates pointing to a reading of 24.0.
Also, UK unemployment rate dropped to 4.5% in August, inline with expectations, leaving rate bets intact, and thereby supporting the pound.
On the technical front, EUR/GBP trades with a bearish bias. Breach below 0.8470 (major trendline support) will plummet prices.
