EUR/GBP oscillates below 0.8500 ahead of UK Retail Sales and Eurozone Consumer Confidence

• EUR/GBP is consolidating in a tight range ahead of major economic events.
• Mounting inflationary pressure in the UK has renewed recession fears.
• The ECB is expected to elevate its rate cycle first time after the Covid-19 pandemic.

The EUR/GBP pair is oscillating in a narrow range of 0.8482-0.8490 in the Asian session as investors are awaiting the release of the Retail Sales in the pound area and Consumer Confidence in the eurozone. On a broader note, the cross is displaying volatility contraction as the asset is juggling in a 0.8448-.8495 range from Tuesday.

The pound bulls are not expected to perform well against the shared currency amid expectations of underperformance from the UK Retail Sales. The annual UK Retail Sales are expected to fall to -7.2% from the prior positive print of 0.9%. While the annual Retail Sales excluding fossil fuels is expected to land at -8.4% against the former figure of -0.6%.  An intense plunge in the Retail Sales may result in an extreme sell-off in sterling. Meanwhile, rising inflationary pressures in the pound zone are also hurting sterling. The UK’s annual Consumer Price Index (CPI) landed at 9% on Wednesday.

Meanwhile, the shared currency bulls are performing better against the pound on rising odds of a rate hike by the European Central Bank (ECB). The higher annual eurozone Harmonized Index of Consumer Prices (HICP) at 7.4% is compelling ECB policymakers to paddle up interest rates. In today’s session, the investor’s focus will remain on the Consumer Confidence, which is seen improved to 21.5 from the previous print of 22.