EUR/GBP off lows, still struggling below 0.87 handle ahead of German CPI

The EUR/GBP cross maintained its offered tone for the second consecutive session, albeit has managed to bounce off session lows near mid-0.8600s.

Currently trading around 0.8670-75 band, the cross caught some fresh bids after the Greek Finance Minister Euclid Tsakalotos clarified that his bailout comments were "distorted" and it's not true that Greece is putting aside money on its own to make the debt repayment. 

   •  Greek Govt Spox denies reports that Greece is considering rejecting tranche

The comments denied earlier reports that Greece may opt out of next bailout payment if lenders fail to reach deal on debt relief and provide some immediate respite for the shared currency. 

However, a sharp recovery move around the GBP/USD major hindered further recovery, with the EUR/GBP cross hanging just 10-15 pips away from early European session swing lows.

Moreover, traders also seemed to refrain from initiating fresh bullish positions ahead of the prelim German CPI print for May. Against the backdrop of Monday's cautious comments by the ECB President Mario Draghi on the region's inflation outlook, a disappointing reading would reaffirm continuation of the central bank's accommodative monetary policy stance and could attract some fresh selling interest around the common currency. 

   •  When is German prelim CPI and how could it affect EUR/USD?

Technical levels to watch

From current levels, the 0.8650 region remains immediate support to defend, which if broken is likely to accelerate the slide towards 0.8625-20 support ahead of the 0.8600 handle. On the upside, any recovery attempts might now confront immediate resistance near the 0.8700 handle, above which a bout of short-covering could lift the cross back towards Friday's swing high resistance near mid-0.8700s en-route 0.8775 level and the 0.8800 handle.