EUR/GBP struggles around 0.8440 ahead of Germany's HICP

• EUR/GBP is facing hurdles around 0.8440 as investors await Wednesday’s Germany HICP.
• The German inflation data is likely to remain unchanged at 8.5% annually.
• A vulnerable UK GDP data may weaken the pound bulls ahead.

The EUR/GBP pair is struggling to cross the immediate hurdle of 0.8440 in the early Tokyo session. The asset is broadly auctioning in a range of 0.8410-0.8452 for the past three trading sessions as investors have shifted their focus towards the Germany Harmonized Index of Consumer Prices (HICP) data, which will release on Wednesday. The cross has continued its four-day winning streak on Tuesday and is likely to extend gains ahead.

A preliminary estimate for the Germany HICP is 8.5%, similar to its prior close on an annual basis. Also, the monthly inflation data is seen unchanged at 0.8%. It is worth noting that Germany is a core member of the European Union (EU) and its inflation data holds significant importance for the eurozone.

No doubt, the Germany HICP is displaying some peak signals, however, this doesn't warrant that the European Central Bank (ECB) won’t go for a rate hike announcement. The ECB has been slowest in elevating interest rates among its Western peers due to regional imbalance after Russia’s invasion of Ukraine. Therefore, the odds of a rate hike are sky-rocketing as the inflation rate is beyond the desired rate.

On the pound front, the release of the Gross Domestic Product (GDP) holds significant importance. The economic data is expected to plummet to 2.8% vs. 8.7% reported earlier on an annual basis. Apart from that, the UK Office for National Statistics will also report the Industrial Production and Manufacturing Production data and their estimates don’t seem lucrative at all.