EUR/GBP remains capped below 0.8830 supply zone post-EZ CPI

   •  Flash version of EZ inflation figures prompts some fresh EUR selling.
   •  Downside remains cushioned on the back of disappointing UK PMI.

The EUR/GBP cross once again failed to decisively break through the 0.8830 supply zone and retreated from tops post-EZ CPI print. 

The flash version of Euro-zone inflation figures came in to show y-o-y price rise of 1.2% in April, slightly below 1.3% reported in the previous month and also expected. Adding to the disappointing headline number, core CPI also fell short of consensus estimates and slipped farther below 1.0% mark, reinforcing the dovish ECB outlook.

The data prompted some fresh selling around the shared currency, albeit the UK services PMI-led retracement in the British Pound helped limit any immediate downside, at least for the time being.

With today's key UK/EZ economic data out of the way, traders now look forward to next week's BoE Super Thursday in order to determine the pair's next leg of directional move.

Technical levels to watch

Immediate support is pegged near the 0.8800-0.8790 region, below which the cross is likely to extend the corrective slide back towards 0.8765-60 support area. On the upside, bulls would be eyeing for a sustained break through the 0.8830 hurdle, which if cleared is likely to assist the cross to dart towards reclaiming the 0.8900 handle with some intermediate resistance near the 0.8870-75 region.