EUR/GBP consolidates near weekly high, sits comfortably above 0.8600 mark

• EUR/GBP holds steady near the weekly high, though lacks follow-through buying.
• The better-than-expected German data underpin the Euro and extend support.
• The mixed setup warrants some caution before placing aggressive bullish bets.

The EUR/GBP cross edges higher for the fourth successive day on Wednesday and looks to build on the recent bounce from a three-month low, around the 0.8545 area touched last week. The cross sticks to its modest gains through the early European session and is currently placed near the weekly top, around the 0.8620-0.8630 region.

The shared currency's relative outperformance could be attributed to the better-than-expected German macro data, which, in turn, is seen acting as a tailwind for the EUR/GBP cross. According to the official data released by the federal statistics authority Destatis this Wednesday, German Industrial Production in Germany declined by 0.1% in October against the 0.5% fall anticipated.

This comes on the back of Tuesday's release of the upbeat German Factory Orders, which rose 0.8% in October against the 0.2% fall estimated. Furthermore, a bleak outlook for the UK economy undermines the British Pound and offers support to the EUR/GBP cross. The upside for the EUR/GBP cross, however, remains capped amid bets for less aggressive rate hikes by the European Central Bank (ECB).

Even from a technical perspective, spot prices, so far, have been struggling to move back above the 100-day SMA. This further makes it prudent to wait for strong follow-through buying before confirming that the EUR/GBP cross has formed a near-term bottom and positioning for any further gains.

Technical levels to watch