EUR/GBP: bulls stay in charge despite Trump's strong dollar preferences

• EUR/GBP bouncing back.
• EUR/GBP through key moving averages but short of the mark still.

EUR/GBP rallied hard on the back of the ECB event and continued to catch a bid through the 100-hr SMA in NY at 0.8741 to score fresh the highest level since 23rd of January and paring back the losses of the last few sessions. EUR/GBP is trading at 0.8776, up 0.57% on the day, having posted a daily high at 0.8788 and low at 0.8687.

EUR/USD trims ECB's gains on Trump's "stronger and stronger dollar"

EUR/GBP has been potentially oversold of late with good data from the EZ in the German ZEW and also the IFO numbers as recent as today. With the ECB willing to let the euro rally, it is little wonder that the cross has been able to recover so dramatically and despite Trump's recent statement about a strong dollar preference.

ECB confident on inflation target

Draghi noted that strong cyclical momentum and this has sent a message to the market that he is indeed confident that inflation will meet the target. Markets now await to see what ECB's Coeure Davos speech has to offer, titled 'The end of easy money' for Friday.

EUR/GBP levels

The strong recovery from below the 0.87 handle has reached up towards the previous supporting level that was the  61.8% retracement of the move seen this year at 0.8697 but is still short of the mark as being a highly congested area. A break of 0.8745 and then a test of the 10-D SMA at 0.8819 would put eyes on  0.8868 again, as being the 100-D SMA before 0.8894 are required ahead of the year high of 0.8903.