EUR/GBP hits two-week high at 0.8430, German CPI eyed

Resumption of selling pressure around the British Pound is seen assisting the EUR/GBP cross to build on to its gains above 0.8400 handle to currently trade at a fresh two-week highs.

The shared currency's outperformance against its British counterpart was supported by a better-than-expected German unemployment data that showed number of unemployed people during June dropped by 7k as against 3k estimated. 

Moving ahead, sentiment surrounding the single currency would be determined by German prelim CPI readings, which would act as a precursor to the composite Euro-zone flash CPI print slated for release during European session on Friday.

From technical perspective, the pair is sustaining its strength above 0.8425 strong resistance and hence, a follow through buying interest above 0.8445-50 region would confirm a near-term break-out and assist the pair to continue scaling higher in the near-term.

Technical levels to watch

On a sustained strength above 0.8450 resistance, the pair seems all set to resume its near-term bullish momentum and reclaim 0.8500 psychological mark, before heading further towards recent daily closing highs resistance near 0.8580 region.

On the flip side, weakness back below 0.8400 handle, leading to a subsequent break below 0.8365-60 horizontal support, could turn the pair vulnerable to extend its near-term corrective move, initially towards recent swing lows support near 0.8250 and eventually towards 0.8200 round figure mark.