EUR/GBP juggles below 0.8520, losses to extend on lower Eurozone GDP forecasts

• EUR/GBP is expected to deliver more losses amid the energy crunch in Eurozone.
• The arrival of winter in Europe escalates the demand for natural gas.
• Lower consensus for GDP is added to the headwinds for shared currency bulls.

The EUR/GBP pair is advancing gradually in early Tokyo after displaying a vertical downside move on Tuesday. The cross is oscillating below 0.8520 and is getting prepared for a fresh downside impulsive wave as Germany hit an energy crunch after Russia cut-off gas supply and the market participants are expecting a significant drop in Eurozone Gross Domestic Product (GDP) numbers, which are due on Friday.

‘When the winter arrives the lone wolf dies but the pack survives. No doubt, the core member of the European Union (EU), Germany is withstanding the decision of reducing dependency on Russian energy imports. However, a sudden halt in natural gas supply to Europe by Russia from its main pipeline after featuring some unwarranted reasons has created havoc for the energy market in the bloc.

It is worth noting that Germany carries a significant dependency on Russian energy imports and a lower supply of energy in times when winter is on the door could trigger recession fears due to high jobless rates. The EU is actively looking for alternative candidates who will address the bumper energy demand in Europe. However, the execution demand plenty of time.

Apart from that, a lower consensus for eurozone GDP numbers is also weakening the shared currency bulls. The economic data is seen lower at 3.4% than the prior release of 5.4% on an annual basis.

On the UK front, soaring price pressures are elevating the hopes of more rate hike announcements by the Bank of England (BOE). The overall UK Consumer Price Index (CPI) has climbed to 9.4% vs. 9.1% recorded in June.