EUR/GBP holds above 23.6% Fib above UK GDP data

• EUR/GBP defends 0.8744 (23.6% Fib R of 0.8929-0.8687).
• Focus on UK GDP.

The recovery in the EUR/GBP from the previous day's low of 0.8687 ran out of steam at a high of 0.8785, but the subsequent drop seems to have come to a halt at 0.8744 (23.6% Fib R of 0.8929-0.8687) ahead of the UK GDP release.

As of writing, the currency pair is trading at 0.8755 levels.

UK Q4 GDP data due today is expected to show the economy expanded 0.4 percent over the quarter in Q4 2017 with an annual growth rate decelerating to 1.5% y/y from 1.7% y/y for the previous quarter. Mario Blascak, Chief European Analyst at FXStreet, writes, " with negative trends in both the UK retail sales and foreign trade being uncertain, the probability of negative surprise is likely to dethrone Sterling from its recent post-Brexit highs."

A weaker-than-expected print could send EUR/GBP back to the previous day's high of 0.8785. On the other hand, an upbeat figure could yield a sustained move below 0.8744 (23.6% Fib R of 0.8929-0.8687).

EUR/GBP Technical Levels

A close above 0.8779 (38.2% Fib R of 0.8929-0.8687) would indicate that a short-term bottom is in place at 0.8687. The pair could then test supply around 0.8809 (Jan. 9 low) and 0.8836 (61.8% Fib R of 0.8929-0.8687). On the downside, breach of support at 0.8744 (23.6% Fib R of 0.8929-0.8687) would shift risk in favor of a drop to 0.87 (psychological support) and 0.8687 (previous day's low).