- EUR/GBP remained under some selling pressure for the second straight session on Tuesday.
- The set-up seems tilted in favour of bears and supports prospects for additional weakness.
The EUR/GBP cross extended the previous day’s sharp retracement slide from three-week tops and witnessed some follow-through selling for the second straight session on Tuesday.
The overnight sustained breakthrough a four-day-old ascending trend-line support was seen as a key trigger for bearish traders. A subsequent weakness below the 50% Fibonacci level of the 0.8938-0.9138 positive move further aggravated the bearish pressure.
The cross dropped to over one-week lows, below the 61.8% Fibonacci level, albeit managed to find some support near the key 0.9000 psychological mark. The mentioned level should now act as a key pivotal point for traders and help determine the near-term trajectory.
Meanwhile, technical indicators have been gaining negative traction and just started drifting into the bearish territory on the daily chart. The set-up supports prospects for an eventual break on the downside and a further near-term depreciating move.
The cross now seems vulnerable to break below immediate horizontal support near the 0.8985-80 region and slide back towards testing monthly daily closing lows support near mid-0.8900s.
On the flip side, any meaningful recovery move might still be seen as a selling opportunity and seems more likely to remain capped, rather fizzle out near the 0.9055-60 resistance zone. That said, some follow-through buying might still assist the cross to aim back to the 0.9100 mark.
EUR/GBP 4-hourly chart
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Technical levels to watch
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