EUR/GBP remains sidelined around mid-0.8500s amid cautious mood

• EUR/GBP stays indecisive near the key support, pressured of late.
• ECB policymakers failed to recall bulls with mixed signals, virus woes, pre-Jackson Hole anxiety restrict immediate moves.
• ECB Minutes to decorate the calendar, Brexit and coronavirus headlines will be important but nothing more than Powell’s showdown on Friday.

EUR/GBP wobbles inside a five-pip trading range around 0.8550 as the European traders brace for Thursday’s bell.

The cross-currency pair dropped the previous day after the European Central Bank (ECB) policymakers flashed mixed economic signals and German IFO statistics also indicated sluggish sentiment in the bloc’s largest economy. It’s worth noting that the fears over a jump in the virus cases from the UK, as hinted from the latest British research published on The Guardian, joins the Brexit woes to keep a tab over the EUR/GBP bears.

It should be noted, however, that the market’s wait for the week’s key risk event, the Jackson Hole Symposium, seems to restrict the latest moves.

ECB’s Vice President Luis de Guindos said, per Reuters, “Central bank could again revise upwards macroeconomic projections.” On the contrary, chief economist Philip Lane argued that it was too early to discuss the end of the Pandemic Emergency Purchase Program (PEPP) in the September policy meeting, as per Reuters.

Further, Germany’s IFO sentiment data for August came in mixed and magnified uncertainty over the pair’s moves.

Even so, bears were challenged by fears of foods shortage in the UK during Christmas, due to Brexit and covid, as well as chatters that a third jab will be necessary as the shots wane protective capacity in six months.

Amid these plays, stock futures print mild losses whereas the US bond coupons pause the two-day uptrend. The same keeps EUR/GBP traders cautious ahead of the ECB Minutes.

Should the Minutes Statement manage to portray optimism surrounding the region’s economy, the pair’s rebound from the key support convergence can’t be ruled out.

Technical analysis

EUR/GBP trades inside a bearish chart pattern while keeping the pullback from 100-DMA, portrayed on Monday. In addition to the quote’s sustained trading below the key level, inside the rising wedge bearish formation, easing of the bullish bias of MACD also keeps the pair sellers hopeful.

Read: EUR/GBP Price Analysis: Bears attack the key support around 0.8550