EUR/GBP spikes to 0.8515, reverses previous session losses to three-week low

The EUR/GBP cross snapped four days of losing streak and staged a goodish recovery on Friday to move back above 0.8500 psychological mark. 

Currently trading around 0.8515-20 band, testing session peaks, the cross has now reversed yesterday's losses to three-week lows amid ongoing profit-taking slide witnessed around the GBP/USD major. On Thursday, the cross remained under selling pressure for the fourth consecutive day in wake of upbeat release of Q4 UK GDP.

In absence of any fundament drivers, Friday’s recovery move could be attributed to some short-covering following a slide of nearly 200-pips in the previous four trading sessions. 

With a relatively lighter economic docket, comments from the ECOFIN meeting could have some impact on the shared currency and eventually provide some impetus for the EUR/GBP cross.

Technical levels to watch

On the upside, 50-day SMA support break-point near 0.8525 region now seems to act as immediate resistance above which a fresh bout of short-covering should lift the cross beyond 0.8550-55 intermediate hurdle towards its next major resistance near 0.8585-90 region. 

Meanwhile on the downside, renewed weakness below 0.8500 handle, leading to a subsequent break below multi-week lows support near 0.8470 region, now seems to accelerate the slide towards monthly lows support near 0.8450 region, en-route 0.8420 support.