EUR/GBP hits two-week high at 0.8470

Extending its bid tone for the fourth consecutive session, the EUR/GBP cross is now building on to its recovery move back above 0.8400 handle.

Currently trading around 0.8465 level, a tepid recovery bounce witnessed around the EUR/USD major, from 14-year lows, has been the sole driver of the pair's ongoing recovery trend since the beginning of the week. Moreover, a subdued trading action around the GBP/USD major, in wake of thin market liquidity conditions ahead of year-end holiday season, failed to hinder the pair's up-move to two-week high. 

In absence of any market moving releases, either from the Euro-zone or UK, the current leg of recovery could also be attributed to short-covering following the pair's recent slide to nearly 5-month low, to the vicinity of 0.8300 handle. 

Iinvestors on Thursday will focus on US macro releases, which might have a diverging effect on the shared currency and the British Pound, eventually provide some impetus for the EUR/GBP cross.

Technical levels to watch

Immediate upside resistance is pegged near 0.8485 level above which the cross seems all set to surpass 0.8500 psychological mark resistance and head towards its next major hurdle near 0.8545-50 region (monthly highs). On the downside, 0.8430 level now becomes immediate support, which if broken might drag the cross back towards 0.8400 handle, en-route 0.8365-60 strong horizontal support.