EUR/GBP stuck in a range below 0.89 handle ahead of UK retail sales

The EUR/GBP cross lacked any firm directional bias and seesawed between tepid gains/minor losses, within 20-25 pips narrow trading range below the 0.89 mark. 

On Tuesday, the cross failed to extend its recovery beyond the mentioned handle and now seems to have entered a consolidation phase as traders now look forward to the UK macro data for some fresh impetus. 

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A combination of diverging factors, with the British Pound still digesting last week's post-BoE upsurge and Tuesday's upbeat German ZEW survey lending support to the shared currency, has eventually led to the pair's subdued/range-bound price action through early European session.

There aren't any macroeconomic data points due for release from the Euro-zone and hence, traders are likely to take cues from the release of monthly retail sales data from the UK. 

The official data is expected to come-in slightly below July's readings and show m-o-m growth of 0.2%, with the yearly rate ticking lower to 1.4% in August. 

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Later during the NY trading session, the FOMC decision-led volatility in the FX market might also provide opportunities for short-term traders. 

Technical levels to watch

Bulls would be eyeing for a strong follow through traction beyond the 0.89 handle, above which the cross is likely to sprint towards 0.8935 horizontal resistance en-route its next major hurdle near the 0.8975-80 region. 

On the flip side, 0.8850 level now seems to act as immediate support, which if broken might turn the cross vulnerable to break below the 0.8800 handle and head towards testing two-month lows support near the 0.8775 region.