EUR/GBP picks bids around 0.8940 ahead of ECB Lagarde’s speech, UK GDP in focus

• EUR/GBP has rebounded firmly after dropping to near 0.8940 ahead of ECB Lagarde’s speech.
• European Commission is planning to a price cap on oil from Russia under a new sanctions package.
• UK’s GDP data is expected to remain in line with the prior readings.

The EUR/GBP pair has displayed a responsive buying move after dropping to near 0.8940 in the early European session. The asset is expected to defend the critical support of 0.8930 as a break below the same will strengthen the sterling bulls. In the Asian session, the cross witnessed a steep fall after testing the crucial hurdle of 0.8980.

Going forward, a lackluster performance is expected from the pair as investors are awaiting the speech from European Central Bank (ECB) President Christine Lagarde. The speech will provide cues above the likely monetary policy action. The already troublesome job of ECB policymakers is heating further as economic fundamentals are not supporting policy tightening measures. Also, commentary on the deepening energy crisis in Germany will be keenly watched.

News wires from Politico cited that the European Commission is planning to a price cap on oil from Russia under a new sanctions package.

On Tuesday, European Commission chief Ursula von der Leyen cited that the leaks of the Nord Stream pipeline were a result of sabotage, and warned of the "strongest possible response". He further added that any deliberate attempt to demolish an active European energy infrastructure is ‘unacceptable’. The group behind the toxic attempt will face retaliation.

This week, Eurozone Consumer Confidence also holds significant importance. As per the preliminary estimates, the sentiment data will remain steady at -28.8. It is worth noting that the economic data is getting more vulnerable over the past year.

Meanwhile, the show-stopper event will be UK’s Gross Domestic Product (GDP) data. The annual and quarterly data is expected to remain steady at 2.9% and -0.1% respectively.