EUR/GBP turns volatile ahead of BOE and EU CPI

In the last few trading hours the EUR/GBP cross turned volatile, swinging wildly in a 50-pip range, before settling around 0.7950 level ahead of the EU CPI and BOE monetary policy announcement.

Earlier during Asian session the cross moved higher to the vicinity of 0.8000 psychological mark but once again failed to sustain at higher level, repeating its recent price action. However, the shared currency continues to outperform as 'Brexit' worries continues to cap any swift recovery for the British Pound. 

Moreover, traders seems to position themselves cautiously ahead of the BoE monetary policy decision announcement, where although the central bank is not expected to change to its monetary policy stance, but is likely to communicate its evaluation and economic risks associated with the upcoming 'Brexit' referendum.

Investors will also deal with other economic releases, including UK monthly retail sales, final May CPI print from the Euro-zone and, inflation data from the US, which are likely to infuse additional volatility in the EUR/GBP cross.

Technical levels to watch

Should the pair continue to sustain its strength above 0.7950, its seems more likely to make a fresh attempt to test 0.8000 psychological mark, which if conquered seems to further lift the pair towards its next major resistance near 0.8090-95 area. On the flip side, weakness below 0.7900 immediate support has the potential to drag the pair back towards 0.7850 intermediate support, ahead of 100-day SMA strong support around 0.7800 region.