EUR/GBP clings to tepid recovery gains post UK data, EZ CPI next

The EUR/GBP cross extended its recovery move from four week lows and jumped to fresh session top after the UK economic releases.

Spot caught fresh bids after the final UK GDP print for the fourth quarter failed to impress the GBP bulls and remained unchanged to show quarterly growth of 0.7% q-o-q. Meanwhile, a greater than expected drop in the UK current account deficit, at £12.09 billion as compared to £16.00 billion expected and £25.70 billion recorded in the previous quarter, extended some support to the British Pound and collaborated towards restricting further up-move for the cross.

Meanwhile, a tepid recovery move around the shared currency helped the cross to hold on to tepid recovery gains near the very important 200-day SMA hurdle around the 0.8580 region.

Next in focus would be the preliminary composite Euro-zone CPI print for March. Against the backdrop of recent dovish ECB headlines, a larger than expected drop might attract some fresh selling pressure around the shared currency.

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Technical levels to watch

A follow through buying interest has the potential to lift the cross towards 0.8600-0.8610 support turned resistance, above which a fresh bout of short-covering is likely to accelerate the move beyond mid-0.8600s towards testing its next resistance near 0.8675 area.

On the downside, weakness back below mid-0.8500s now seems to drag the cross back towards monthly lows support near the key 0.8500 psychological mark.