EUR/GBP mildly weaker below mid-0.8400s after EZ GDP

Having failed to build on early up-move to session high near 0.8475 region, the EUR/GBP cross reversed all of its daily gains and held in neutral territory after EZ GDP figures.

Currently hovering around 0.8445-50 band, the cross had a muted reaction to the prelim Euro-zone GDP growth numbers, which matched consensus estimates and came-in to show 0.5% q-o-q growth. 

The disappointment, however, came from a larger-than-expected drop in the Euro-zone PPI print for March, coming-in at -0.3% as compared to -0.1% expected and last month’s flat reading, which negated the in-line release of growth numbers. 

Meanwhile, today's surprisingly stronger UK construction PMI added to Tuesday's upbeat manufacturing PMI print and further collaborated to keeping a lid to any swift near-term recovery for the cross. 

Technical levels to watch

Immediate support is pegged near 0.8420-15 zone, below which the cross is likely to weaken below the 0.8400 handle and head towards testing its next support near 0.8370-65 horizontal level.

On the upside, 0.8475-80 area now seems to have emerged as immediate hurdle, which if cleared decisively has the potential to lift the cross beyond the key 0.85 psychological mark towards testing its next key resistance near 0.8530 region.

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