• A Spring formation below 0.8600 strengthened the Euro bulls for a firmer recovery.
• The RSI (14) has shifted into the 40.00-60.00 range, which indicates a consolidation ahead.
• The speech from ECB Lagarde will provide cues about the likely monetary policy action ahead.

The EUR/GBP pair is struggling to cross the immediate hurdle of 0.8610 in the Asian session. Earlier, the cross resurfaced after dropping marginally below the cushion of 0.8600. The asset is expected to display volatile performance ahead as investors are awaiting the speech from European Central Bank (ECB) President Christine Lagarde scheduled for Thursday.

Meanwhile, accelerated consumer spending in the United Kingdom has triggered the risk of higher inflation ahead. UK’s Like-For-Like Retail Sales reported by the British Retail Consortium (BRC) escalated to 4.1% from the prior release of 1.2% in November on an annual basis.

On a four-hour scale, the cross has witnessed a significant recovery after a Spring formation below the horizontal support plotted from October 17 low around 0.8578, which indicates that market participants considered the asset a value-buying.

The cross has managed to sustain above the 20-period Exponential Moving Average (EMA) at around 0.8600. While the 50-EMA at 0.8616 has not been conquered yet.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range, which indicates a consolidation ahead.

For further upside, the cross needs to overstep Monday’s high at 0.8635, which will drive the asset towards November 30 high at 0.8661, followed by the round-level resistance at 0.8700.

On the contrary, a break below December 1 low at 0.8547 will drag the cross for a fresh three-month low near the round-level cushion of 0.8500. A slippage below the latter will expose the asset for more downside toward August 26 low at 0.8425.

EUR/GBP four-hour chart