EUR/GBP Trims Early Gains After UK GDP Release
Just ahead of the UK GDP print for the first quarter of 2016, the EUR/GBP
pair gained momentum but failed to build on to the early strength and
has now dropped below 0.7775 level to currently trade near 0.7765.
The UK Office for National Statistics reported UK economy registering a tepid growth of 0.4%, down from 0.6% recorded in previous quarter but still matching expected print of 0.4% q/q growth. The yearly growth rate was unchanged at 2.1% and was higher than 2.0% expected. The 'Brexit', however, remains key risk and might cap any sharp appreciation of the UK Pound.
Technical levels to watch
Repeated rejections from immediate strong resistance near 0.7800 round figure mark and a subsequent break below 0.7750 level (recent lows) has the potential to trigger a fresh leg of weakness, initially towards 0.7735 intermediate support before the pair extends its weakness towards its next major support near 0.7715 level (March daily closing low level support).
Meanwhile, a move back above 0.7775-80 zone, leading to a momentum past 0.7800-0.7815 strong resistance would bring 0.7850 resistance back in action.