EUR/GBP steady above 0.8700 on hawkish Draghi

• Mario Draghi the President of the ECB is upbeat on the economy in the Eurozone. 

• Draghi sees the recent slowdown as temporary and sees the inflation rise to 2% over time.

• The euro got a boost on the news and is now consolidating above the 0.8700 level on EUR/GBP.

The EUR/GBP is trading at around 0.8717  down 0.16% on Thursday as Draghi is answering questions at the ECB press conference. Draghi refers to the Eurozone as an “Economy that grows strongly”. He downplayed the recent slowdown in economic indicator. 

Indeed, Draghi said that moderation in growth is natural after strong growth earlier. He justifies the pullback in the economy is due to temporary factors. The President of the ECB is confident “the fall has ended and we are above historical averages.”

The EUR is gaining strength against the GBP and the USD as Draghi is confident that the 2% inflation target will be reached. President Draghi is now using the term “Steady hands” which means prudence, patience and persistence. 

The EUR/GBP is getting a boost after finding an intraday low at 0.8700 handle but the cross lacks any clear momentum ahead of the UK Gross Domestic Product on Friday at 8:30 GMT. The GDP data is crucial for the GBP as previous key macroeconomic data (inflation, wages, retail sales) disappointed the market. Additionally, comments from Bank of England officials expressed doubts about raising rates soon next month. So a miss on GDP can see traders giving up on any hope of rate hike in May. 
  
EUR/GBP 4-hour chart

The EUR/GBP is finding intraday support at the 0.8700 handle, further down support is priced in at 0.8644 swing low. Resistances are seen at 0.8752 swing high and at 0.8792 cyclical high.