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• EUR/GBP trades in positive territory for the fourth consecutive day around 0.8575 in Tuesday’s early European session.
• German Factory Orders climbed 3.9% MoM in June vs. -1.6% prior, better than expected. 
• BoE’s Bailey said the central bank must be careful about further rate cuts, while investors bet on more rate cuts before year-end. 

The EUR/GBP cross extends the rally near 0.8575 during the early European session on Tuesday. The uptick of the Euro (EUR) is bolstered by the recent upbeat German economic data. Traders will take more cues from the Eurozone June Retail Sales for June, which is due later on Tuesday. 

The stronger-than-expected German Factory Orders contribute to the shared currency’s further upside. Data released by the Federal Statistics Office showed on Tuesday that the country’s Factory Orders jumped 3.9% MoM in June from a fall of 1.6% in May. This figure was above the market consensus of 0.8%. 

The Eurozone June Retail Sales are expected to increase 0.1% YoY in June. If the retail sector in the Eurozone shows improvement, this could lift the Euro (EUR) against the Pound Sterling (GBP). On the other hand, the downbeat outcome might trigger the potential European Central Bank (ECB) interest rate cuts in September, which might drag the shared currency lower. 

On the GBP’s front, the Bank of England (BoE) decided to cut its interest rates by 25 basis points (bps) to 5% last week. BoE governor Andrew Bailey noted that the rate decision will be decided "from meeting to meeting,"  but market players expect the UK central bank will deliver more rate cuts in September, with the chance of a move at its next meeting in September seen as a nearly 55% probability.

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