EUR/GBP surges back closer to two-month highs, EZ CPI in focus

The EUR/GBP cross built on previous session's sharp rebound from mid-0.8600s and moved back closer to over two-month highs touched last Friday.

Currently trading around 0.8735 region, the cross regained traction amid easing concerns over Greece's financial situation after the Greek Finance Minister Euclid Tsakalotos, on Tuesday, denied earlier reports that the country may opt out of getting its next bailout payment if creditors fail to agree on debt relief.

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Meanwhile, the selling pressure around the British Pound, following the latest poll that showed May's Conservative Party might fall short of gaining an overall majority in the upcoming election on June 8, further collaborated to the strong bid tone surrounding the cross.

Next in focus would be the UK economic data, while from the Euro-zone preliminary inflation numbers would drive sentiment surrounding the shared currency and provide some fresh impetus for the EUR/GBP cross.

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Technical levels to watch

From current levels 0.8750 level might continue to act as immediate hurdle, above which the cross is likely to aim towards reclaiming the 0.8800 handle with some intermediate resistance near 0.8770-75 zone.

On the downside, retracement back below 0.8610-0.8600 region could drag the cross back towards 0.8670 intermediate support en-route 0.8655-50 support area (yesterday's swing low).