EUR/GBP refreshes session top after UK manufacturing data

The EUR/GBP cross built on its tepid recovery move and spiked to fresh session tops near 0.8425 following the release of UK manufacturing data. 

According to the data released just a while ago, UK manufacturing production contracted 0.6% m-o-m, while industrial production also witnessed a slowdown and dropped 0.5% during March. The data were worse than consensus estimates and weighed a little on the British Pound. 

Adding to the disappointment, UK visible trade deficit rose more-than-expected, coming-in at £13.441 billion for March as compared to £11.8 expected and £11.448 previous. 

However, barring the initial reaction to the data, the cross lacked any follow through momentum as investors seemed reluctant to place fresh bets heading into the next big event risk - BoE Super Thursday.

The central bank will not only announce its latest monetary policy decision but would release the keenly watched quarterly inflation report and minutes of the meeting, which should trigger a fresh bout of volatility across GBP crosses.

Meanwhile, a mildly positive sentiment surrounding the shared currency, with the EUR/USD pair staging a minor recovery from 2-week lows touched in the previous session also helped the cross to hold its neck above the 0.8400 handle. 

Technical levels to watch

A follow through buying interest has the potential to lift the cross towards 0.8440-45 intermediate resistance, above which a fresh bout of short-covering could lift the pair back towards the key 0.85 psychological mark.

On the flip side, renewed weakness below the 0.8400 handle could get extended back towards 0.8380-75 support before the cross eventually drops to 0.8355-50 strong support.