Brocker.Org: EUR/GBP struggling near weekly lows ahead of EZ CPI and UK GDP

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The EUR/GBP cross well-offered for the third consecutive session and is currently placed at fresh weekly lows near 0.8415 region.

Spot extended its reversal move from two-week highs, touched earlier this week, and has now filled majority of its weekly bullish gap led by Emmanuel Macron’s victory in the first round of the French Presidential election.

With markets looking beyond the initial euphoric reaction to election results, cautious comments on EZ’s inflation and economic outlook by the ECB President Mario Draghi, during the post meeting press conference on Thursday, weighed on the shared currency. 

   •  ECB Review: Draghi, a bull in dove’s clothing – TDS

Meanwhile, persistent positive sentiment surrounding the British Pound, against the backdrop of a possible ‘soft Brexit’ scenario following the UK PM Theresa May’s announcement for snap election, further collaborated to the heavily offered tone surrounding the cross.

Moving ahead, investors now look forward to important macro releases – the advanced Euro-zone inflation figures and prelim UK GDP growth numbers, and determine the next leg of directional move for the cross.

   •  UK: GDP to decelerate from 0.7% q/q in Q4 to only 0.4% q/q in Q1 – TDS

Technical levels to watch

Weakness below 0.8415 level could get extended towards 0.8385-80 support, which if broken is likely to accelerate the slide further towards 0.8355-50 strong horizontal support. On the upside, any recovery attempts beyond 0.8450-55 zone might now confront strong hurdle near the key 0.8500 psychological mark, above which a bout of short-covering could lift the cross beyond two-week highs resistance near 0.8530 level towards its next barrier near the 0.8570 region.

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