EUR/GBP recovers to 0.7830 on weaker-than-expected UK CPI

The EUR/GBP pair spiked from session through of 0.7800 to 0.7830 after the release of softer-than-expected UK CPI print, further pointing to the effects of 'Brexit' uncertainty over economic activity.

According to the data released by the Office for National Statistics (ONS) on Thursday, the UK’s consumer prices recorded a rise of 0.3% in April over the past year. Consensus expectations were pointing to match March reading of a 0.5% rise. Meanwhile, the core CPI (excluding volatile food and energy component) also fell short of market expectations and printed a rise of 1.2% as compared to expected print of 1.5% recorded in March as well.

Immediately after the release, the pair recovered to 0.7830 before retracing few-pips to currently trade near 0.7822. Investors would now eye US CPI print that is likely to determine the near-term trajectory for the EUR/USD and GBP/USD majors and eventually affecting movement in the EUR/GBP cross.

Technical levels to watch

Bulls would like the pair to sustain its strength above 0.7925, which could further assist the pair to extend its recovery towards 0.7950 level.

Conversely, a drop below 0.7800 level would open room for extension of the pair’s weakening trend immediately towards 0.7780 horizontal support ahead of April daily closing lows support near 0.7750 level.