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    EUR/GBP erase gains, turns flat at 0.7930 Haresh Menghani

    Heading into the BoE monetary policy decision, the EUR/GBP cross erased majority of its gains to currently trade at the session low level, flat around Wednesday’s closing level. The pair is on the verge of breaking into negative territory any time.
     
    A sudden bout of selling pressure seems to have emerged in the EUR/USD major after the release of Euro-zone final CPI reading for the month of May. The reading was mostly in-line with consensus expectations and the preliminary reading but continues to reflect deflationary environment, which has been a long-term key concern for the European Central Bank.Investors now turn their attention to the BOE monetary policy announcement in a short while from now. The minutes of the meeting and the rate vote count will also be released at the same time. Market participants are not expecting the central bank to announce any change to its monetary policy stance, but the policy statement is likely to raise concerns over the economic risks associated with the upcoming 'Brexit' referendum on June 23.However, looming uncertainty surrounding 'Brexit' might continues to cap any swift recovery for the British Pound and hence might limit any sharp slide for the EUR/GBP cross.Technical levels to watchExtension of the weakening trend below 0.7900 seems to drag the pair immediately towards 0.7850 horizontal support before heading towards 100-day SMA important support around 0.7800 handle. Meanwhile on the upside, 0.7950 remains immediate strong resistance and is followed by a strong psychological mark resistance near 0.8000 handle. A convincing strength above 0.8000 handle has the potential to continue boosting the pair towards April daily closing highs resistance near 0.8090-95 region.


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