EUR/GBP finds barricades around 0.8440 as UK GDP hogs limelight

• EUR/GBP has slipped lower after facing selling pressure around 0.8440.
• An unchanged German HICP at 8.5% has weakened the shared currency bulls.
• The US GDP is expected to remain vulnerable ahead.

The EUR/GBP pair has faced hurdles around the critical resistance of 0.8440 in the early Tokyo session. Earlier, the cross displayed a pullback move after a sheer downside to near 0.8420. The asset plunged on Wednesday after declining below the critical support of 0.8440 as the German Harmonized Index of Consumer Prices (HICP) remained unchanged at 8.5%. Also, the German inflation landed in line with the estimates.

It is worth noting that the US economy also reported the inflation rate, which tumbled sharply due to weak oil prices. The impact of weak oil prices should also be reflected in German inflation too. This indicates that the ongoing energy crisis in Germany after Russia blocked the major pipeline of gas to Europe shrugged off the impact of lower oil prices.

And, the market participants dumped the shared currency bulls. Well, the multiplier effects of the same will be faced by the European Central Bank (ECB) and their job of containing the inflation mess will get trickier.

On the UK front, the market participants are expecting a shrink in Gross Domestic Product (GDP) in the second quarter by 0.2% against the expansion of 0.3%. Also, the UK economy is expected to shrink by 1.3% against the expansion of 0.5% on a monthly basis. Adding to that, the estimate for annual GDP is 2.8%, significantly lower than the prior print of 8.7%.

Adding to that, an underperformance is also expected on the Manufacturing production front. The annual data is likely to slip lower to 1.3% vs. the prior release of 2.3%. Whereas, Industrial Production could display an uptick to 1.6% from 1.4% annually.