EUR/GBP eases further, below mid-0.8700s post-UK GDP

   •  GBP boosted by slightly better yearly GDP growth rate.
   •  Renewed pickup in EUR demand now seemed to cap gains. 

The EUR/GBP cross came under some renewed selling pressure on Friday and eroded part of previous session’s post-ECB strong recovery move from 7-month lows.

The British Pound got a minor boost after the prelim UK GDP data showed that the economy is estimated to have grown by 0.4% during the fourth quarter of 2017. Meanwhile, the yearly rate came-in slightly better than consensus estimates and showed that the pace of economic growth eased to 1.5% (1.4% expected) during the 12-months ending December, from 1.7% reported in the previous quarter. 

Barring the initial reaction, the cross lacked any follow-through selling pressure as the 1.5% y-o-y reading was still the slowest yearly growth since Q1 2013. Moreover, the full-year GDP growth for 2017 stood at 1.8%, slower than 1.9% in 2016 and the slowest growth in 5-years.

With today’s key macro data out of the way, the cross now seems more likely to enter a consolidation phase on the last trading day of the week. 

Technical levels to watch

Immediate support is now pegged near the 0.8710-0.8700 region, which if broken could accelerate the fall further towards multi-month lows support near the 0.8680 region en-route 0.8655-50 support.

On the upside, any up-move might continue to confront fresh supply near the 0.8765-70 region and is closely followed by the next major hurdle marked by the 0.8800 round figure mark.