EUR/GBP holds above 0.8900 handle post UK GDP

After Tuesday’s brief pause, the EUR/GBP cross resumed with its corrective slide from the vicinity of key 0.90 psychological mark and dropped to multi-day lows during early European session. 

The cross, however, recovered from lows after the latest UK GDP print showed another quarter of weak economic growth, with the preliminary estimates showing a tepid growth of 0.3% during the second quarter of 2017. 

The reading was better than 0.2% growth recorded in the previous quarter but was mostly in-line with market consensus and did little to raise expectations of any near-term BOE action. 

In absence of any major surprise, today’s data failed to provide any fresh bullish impetus to the British Pound and helped the cross to bounce off lows to currently trade around 0.8930 region. 

It would now be interesting to see if bears remain in control or the current pull-back is utilized as an opportunity to initiate fresh bullish bets amid expectations of a possible ECB tapering at the September meeting, which might continue to underpin the shared currency. 

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Technical levels to watch

On a sustained break below the 0.8900 handle, the corrective slide could get extended towards its next support near 0.8865 level. Meanwhile, on the upside, 0.8945-50 region now seems to act as immediate resistance, above which the cross could make an attempt to surpass 0.8975 hurdle and aim towards conquering the 0.9000 handle before eventually heading towards its next major hurdle near 0.9030 area.