EUR/GBP recovery losses momentum, now back around 0.8260

The EUR/GBP pair’s attempted recovery from session low level of 0.8243 got sold into and the pair has now dropped back to 0.8260 level.

Thursday's initial selling pressure was on the back of some short-covering move witnessed around the GBP/USD major. The move, however, was short-lived after UK current account posted a larger-than-expected deficit of 32.6 billion during the first quarter of 2016. Meanwhile, the final GDP print matched previous reading and came-in to show a 0.4% growth for Q1 2016.

Adding to this, a better-than expected Euro-zone CPI prints extended further support for the pair's recovery. The region's inflation in June recorded a nominal up-tick of 0.1% y-o-y, but was enough to temporarily lift the Euro-zone out of the deflationary phase. The core CPI print also surpassed consensus estimates by printing 0.9% jump in prices over the previous year.

Focus now shifts to announcement for the leader of the Conservative party and BOE Governor Mark Carney speech regarding how UK would handle the Brexit referendum. ECB minutes might also provide some short-term momentum play in the EUR/GBP cross.

Technical levels to watch

Bulls would be looking for a sustained move above 0.8300 handle, above 0.8330 seems given. A follow through buying interest above 0.8330 resistance now seems to open room for extension of the pair's near-term upward trajectory towards March 2014 highs resistance around 0.8400 round figure mark. On the flip side, decisive break below 0.8200 level might now trigger a short-term corrective move that might drag the pair immediately towards a previous strong resistance break-point, now turned support, near 0.8100 area.