Brocker.Org: EUR/GBP struggling to build on tepid recovery move

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The EUR/GBP cross snapped three consecutive days of losing streak and traded with minor gains around 0.8430 region.

Monday’s news headlines, via the UK Times, that the UK PM Theresa May might walk away from EU without a deal, in response to reports that EU leaders have unanimously agreed tough negotiating guidelines for Brexit talks with the UK, attracted some fresh selling pressure on the British Pound. 

   •  UK: Q1 GDP growth was disappointing – HSBC

However, an offered tone surrounding the EUR/USD major, primarily led by a broad based US Dollar strength and despite of Friday’s upbeat Euro-zone CPI print, collaborated towards capping any additional recovery for the EUR/GBP cross.

   •  Eurozone: Inflation numbers flying high – HSBC

With markets digesting the latest development on the Brexit negotiation process, holiday-thinned market liquidity conditions has also failed to provide an additional boost to the pair’s tepid recovery move. Most major European markets, including the UK, would remain closed on Monday in observance of May Day. 

Technical levels to watch

From current levels, 0.8460-65 area is likely to act as immediate hurdle, above which the cross is likely to aim towards reclaiming the key 0.8500 psychological mark before heading back towards a two-week high resistance near 0.8530 level.

Meanwhile on the downside, the 0.84 handle remains immediate support to defend, which if broken should accelerate the slide towards 0.8385-80 support en-route 0.8355-50 area.

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