EUR/GBP bulls await a sustained move beyond 0.8600 mark

• EUR/GBP gained positive traction for the second consecutive session on Tuesday.
• An upward revision of the Eurozone GDP growth provided a modest lift to the euro.
• A mildly offered tone around the sterling remained supportive of the intraday uptick.

The EUR/GBP cross shot to three-day tops during the first half of the European session, with bulls making a fresh attempt to conquer the 0.8600 mark.

The cross attracted some dip-buying near the 0.8570 area and has now moved into the positive territory for the second successive session on Tuesday. The recent hawkish rhetoric from a host of European Central Bank (ECB) policymakers turned out to be a key factor behind the shared currency's relative outperformance. Apart from this, a modest US dollar strength weighed on the British pound and provided a modest lift to the EUR/GBP cross.

Meanwhile, the latest leg of an uptick over the past hour or so was sponsored by an upward revision of the Eurozone GDP growth figures for the second quarter. The economy expanded 2.2% during the April-June period as against 2% estimated originally. This helped offset a larger than anticipated fall in the German/Eurozone ZEW Economic Sentiment Index for the current month and remained supportive of the bid tone surrounding the EUR/GBP cross.

On the other hand, the UK-EU stand-off on the way forward for the Northern Ireland Protocol might continue to act as a headwind for the sterling. This, in turn, supports prospects for a further near-term appreciating move. That said, bullish traders seemed reluctant from placing aggressive bets, rather preferred to wait for a fresh catalyst from the highly-anticipated ECB monetary policy decision, scheduled to be announced on Thursday.

It is still not clear that there is a majority in the ECB governing council about the gradual scaling back of the central bank's monetary stimulus. This further makes it prudent to wait for a sustained strength beyond the 0.8600 round-figure mark before positioning for an extension of the recent strong recovery move from YTD lows touched on August 12.

Technical levels to watch