EUR/GBP jumps to 0.8450 level, recovers part of yesterday's lost ground

The EUR/GBP cross staged a minor recovery and reversed a part of Thursday's sharp reversal move from the vicinity of 0.8500 psychological mark.

Currently trading around 0.8450-45 region, testing session tops, a follow through recovery in the EUR/USD major, and consolidative price action around the GBP/USD pair, was seen lending some support to the EUR/GBP cross on Friday. 

A dull economic docket, and lack of significant drivers, has thus far helped the cross to defend two-month lows support near 0.8400 handle. It, however, remains to be seen if the ongoing recovery in the shared currency is backed by genuine buying or is just led by a bout of short-covering, against the backdrop of generally weaker greenback. 

Moreover, the underlying political uncertainty in France might continue to undermine the Euro, which is something traders would continue to monitor in determining the pair's near-term direction. Nevertheless, the cross might still be headed for its lowest weekly close since mid-December. 

Technical levels to watch

A follow through recovery is likely to confront immediate resistance near 0.8475 region ahead of 0.8500 strong hurdle above which the momentum could get extended towards 50-day SMA barrier near 0.8545-50 region.

On the downside, weakness below 0.8425 level might continue to find support near 0.8400 handle, which if broken decisively is likely to accelerate the slide towards 0.8370-65 intermediate support, en-route mid-Dec. lows support near 0.8340-35 zone.