• EUR/GBP opened with a bullish gap on Monday, though lacked follow-through buying.
• The Ukraine crisis continued acting as a headwind for the euro and capped the upside.
• Some cross-driven strength benefitted sterling and collaborated to keep a lid on the cross.

The EUR/GBP cross maintained its bid tone through the mid-European session and was last seen trading around the 0.8370 region, just a few pips below the one-week high.

The first round of the French presidential elections showed the incumbent Emmanuel Macron held a slim lead in the polls over his far-right rival Marine Le Pen. This, in turn, offered some support to the shared currency and led to a bullish gap opening for the EUR/GBP cross.

Spot prices added to Friday's bounce from the 0.8300 neighbourhood, though lacked any follow-through buying or bullish conviction. Investors remain concerned that the European economy, which relies heavily on Russia to meet its energy needs, will suffer the most from the Ukraine crisis.

On the other hand, some cross-driven strength stemming strong intraday rally in the GBP/JPY cross benefitted the British pound and further collaborated to cap gains for the EUR/GBP cross. This, in turn, warrants some caution ahead of the European Central Bank meeting on Thursday.

This makes it prudent to wait for some follow-through buying before confirming that the recent sharp fall from levels just above the 0.8500 psychological mark, or the YTD peak has run its course. Nevertheless, the EUR/GBP cross, so far, has managed to stick to its gains above the mid-0.8300s.

In the absence of any major market-moving economic releases, fresh developments surrounding the Russia-Ukraine saga will influence the shared currency. This, in turn, should provide some impetus to the EUR/GBP cross, though traders might refrain from placing aggressive directional bets.

Technical levels to watch