The British pound strengthened against the Euro on Friday as investors digested the latest GDP data. The UK economy shrank 0.1% in Q2 and 0.6% in June only, with both readings coming half the market forecasts. Today's data was not as bad as expected, however it still points out that the British economy may face a significant slowdown. Meanwhile, the ECB is still expected to lift interest rates by another 50 bps in September, however concerns of a looming economic crisis in Europe persist as inflation shows no signs of peaking and the energy crisis is far from over, which in turn puts pressure on the euro. During today's session EURGBP pair bounced off major resistance at 0.8470, which is marked with previous price reactions and 50.0% Fibonacci retracement of the upward wave launched in March 2022. If current sentiment prevails another downward impulse towards support at 0.8410 may be launched.
EURGBP, H4 interval. Source: xStation5
