EUR/GBP jumps back closer to 0.89 handle ahead of German ZEW

The EUR/GBP cross traded with some positive bias for the second consecutive session and was seen building on previous session's recovery move from near two-month lows.

With the British Pound consolidating its post-BoE upsurge, a modest pickup in the EUR/USD major has been one of the key factors helping the pair's recovery move from sub-0.88 level, the lowest level since mid-July touched last Friday.

The shared currency's relative outperformance could also be attributed to higher-than-expected Euro-zone current account surplus, coming in at €25.1 billion for July as compared to €22.3 billion expected and previous month's €22.8 billion (revised higher from €21.2 billion surplus reported earlier). 

There are no macroeconomic releases due from the UK and hence, focus would remain on the release of German ZEW Economic Sentiment Index for September, due for release in a short while from now.

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Technical levels to watch

Currently trading around the 0.8875-80 region, immediate resistance is pegged at the 0.8900 handle, above which a bout of short-covering could lift the cross towards 0.8935 horizontal resistance. 

On the flip side, 0.8850-45 area now seems to protect immediate downside, which if broken would turn the pair vulnerable to head back towards retesting the 0.8800 handle ahead of 0.8775-70 support area.