EUR/GBP: bulls running out of steam, or headed to 0.8936

• EUR/GBP: bulls back in control.
• EUR/GBP: running on fumes? EUR/USD in the driving seat.

EUR/GBP has recovered from the late European lows and rallied on dollar weakness and even remained bid on the UK CPI data that beat expectations. Currently, EUR/GBP is trading at 0.8899, up 0.17% on the day, having posted a daily high at 0.8906 and low at 0.8858.

The market has already been pricing in around 70% probability of a rate hike in May from the BoE, and the CPI data lends a little more support t the BoE's hawkish tone last week - (UK Jan CPIm/m -0.5% vs 0.6% expected). However, Brexit concerns continue to anchor the pound and the CPI headline data wasn't enough to overshadow the softer RPI and PPI readings - aking for good two-way business in cable. 

What is next this week?

Attention will now turn to US CPI and retail sales as well as the UK’s retail sales later this week. For the meantime, EUR/USD is in the driving seat, with the euro up through the 210hr SMA at 1.2313 making a high of 1.2371 from a low of 1.2284. 
DXY is not having a good today, trading offered within a range of between 89.616 - 90.177, - 0.66% at 89.617 spot. 

EUR/GBP levels

Bulls look for the top of a shallow channel at 0.8962 through 0.8936 January high and the 0.9034 October 2017 high ahead of 0.9071/0.9175 61.8% and 78.6% Fibonacci retracements. Bears need to close below 0.8770 ahead of the December and January lows at 0.8689/87 while