EUR/GBP remains conflicted ahead of Eurozone sentiment data

• EUR/GBP remains anchored below psychological resistance at 0.8400.
• Eurozone sentiment data for May and comments from ECB speakers are in focus.
• British Pound remains supported by the latest CPI and Retail Sales print.

The Euro (EUR) remains conflicted against its British Pound (GBP) counterpart on Monday, struggling to build sustained momentum despite an early attempt to recover last week's losses.

Following United States (US) President Donald Trump's announcement to delay the implementation of tariffs on European imports until July 9, the Euro found some support, helping EUR/GBP limit downside pressure. 

However, the pair remains capped below the 0.8400 mark at the time of writing, as the British pound continues to draw strength from steady UK fundamentals and relatively firm inflation expectations.

Trump had initially proposed a sweeping 50% tariff on all European Union (EU) goods, but confirmed the extension following a call with European Commission President Ursula von der Leyen, who stated that "Europe is ready to advance talks swiftly and decisively."

Additionally, comments from European Central Bank (ECB) President Christine Lagarde assisted in limiting further losses. Lagarde emphasized the need to strengthen the Euro's global standing amid growing geopolitical and economic uncertainty.

Lagarde stated, "The international role of the Euro is not something we can take for granted -- it must be earned. And that means building trust through deeper capital markets, stronger institutions, and a commitment to economic security."

Despite the Euro's attempt to benefit from Monday's events, EUR/GBP remained capped below the 0.8400 handle, as the British pound continued to draw support from firm domestic data and relatively stable inflation expectations. 

EUR/GBP prepares for Eurozone sentiment data

On Tuesday, the Eurozone will release a series of key sentiment indicators for May, including Business Climate, Consumer Confidence, Economic Sentiment, Industrial Confidence, and Services Sentiment. 

These reports will offer valuable insight into how businesses and consumers are perceiving economic conditions across the region.

For EUR/GBP, this data could be pivotal in determining whether the Euro can sustain its recent strength against the British Pound. Stronger-than-expected readings would likely reinforce confidence in the Eurozone's resilience, potentially delaying further ECB rate cuts and providing a lift to the single currency.

On the other hand, weaker sentiment figures may weigh on the Euro, particularly if ECB policymakers such as Klaas Knot and Joachim Nagel adopt a dovish tone in their remarks scheduled later in the day. In such a scenario, EUR/GBP bears may regain control, especially if UK fundamentals remain comparatively firm and continue to support the Pound.