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  • EUR/GBP witnessed some selling on Tuesday and retreated further from four-week tops.
  • The offered tone surrounding the euro was seen as a key factor exerting some pressure.

The EUR/GBP cross was seen hovering near the lower end of its daily trading range, with bears now looking to extend the slide further below the 0.9100 mark.

The cross continued with its struggle to find acceptance above the 0.9135-40 supply zone and witnessed some selling on Tuesday, snapping five consecutive days of the winning streak. The EUR/GBP cross retreated further from four-week tops and the downtick was sponsored by the shared currency’s relative underperformance against its British counterpart.

The euro bulls looked past the latest optimism over a landmark agreement on the EU’s €750 billion pandemic recovery fund and opted to take some profits off the table amid a modest US dollar rebound. This, in turn, was seen as one of the key factors exerting some pressure, forcing the EUR/GBP cross to reverse the previous day’s positive move.

On the other hand, the British pound was seen consolidating its recent gains and remained confined in a narrow band through the mid-European session, rather unaffected by renewed fears of a no-deal Brexit. It is worth reporting that the latest round of negotiations ended last Thursday without any significant progress on the post-Brexit trade deal.

In the absence of any major market-moving economic releases, either from the Eurozone or the UK, the sentiment surrounding the shared currency turned out to be an exclusive driver of the EUR/GBP pair’s momentum on Tuesday.

It will now be interesting to see if the cross can attract any dip-buying or the pullback marks another failure ahead of mid-0.9100s, which might prompt some technical selling and pave the way for a further depreciating move.

Technical levels to watch