Fresh Muti-Week Lows Seen, EUR/GBP Flows Help Cross Off Lows

Much like EUR/USD. GBP/USD has registered fresh multi-week lows, although last prints ~15 pips off worst levels, sitting at $1.2348. The pair received some light support from EUR/GBP flows in the wake of final Q1 GDP data out of Germany, as revisions to that data revealed that the German economy slipped into a technical recession.

• Ex-U.S. growth differentials and stickier than previously foreseen UK inflation have weighed on the pair in recent weeks, even with the BoE terminal rate outlook shifting notably higher on the OIS strip in recent days (as the GBP negative matters dominate).
• Technically, bears remain in the driver's seat and the pair continues to weaken. Support at the 50-day EMA has been breached, as has the Apr 10 low. This signals scope for an extension of the bear cycle towards $1.2242 next, a Fibonacci retracement. On the upside, initial firm resistance is seen at $1.2469, the 20-day EMA.
• Comments from BoE’S Haskel headline the UK docket today.