• EUR/GBP gains some traction and snaps a four-day losing streak to over a one-week low.
• A rather unimpressive UK GDP report remains supportive of the modest intraday uptick.
• Signs of easing inflationary pressures in the Eurozone keep a lid on any further gains.

The EUR/GBP cross attracts some buyers on Friday and for now, seems to have snapped a four-day losing streak to over a one-week low, around the 0.8840-0.8835 region touched the previous day. The cross sticks to a mildly positive bias through the early part of the European session and is currently placed around the 0.8860-0.8865 area.

The British Pound's relative underperformance comes on the back of a rather unimpressive UK GDP report, which showed that the economy contracted more than anticipated, by 0.5% in December. Furthermore, the economy stagnated during the final three months of 2022. This, to a larger extent, overshadows better-than-expected UK Manufacturing and Industrial Production figures and offers some support to the EUR/GBP cross.

Commenting on the growth figures, Britain's Finance minister Jeremy Hunt said that the economy was more resilient than expected, but still not clear of danger, which, in turn, fails to impress the GBP bulls. The shared currency, on the other hand, draws some support from rising bets for additional jumbo rate hikes from the European Central Bank (ECB) in the coming month. This further acts as a tailwind for the EUR/GBP cross.

That said, signs of easing inflationary pressure in the Eurozone keep a lid on any meaningful gains for the Euro, at least for the time being. Moreover, the lack of follow-through buying warrants some caution before confirming that the EUR/GBP pair's recent sharp pullback from the highest level since September 2022 has run its course.

Technical levels to watch