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  • EUR/GBP remained under some intense selling pressure for the fourth straight session.
  • Oversold conditions on hourly charts warrant caution before placing fresh bearish bets.
  • The cross still seems vulnerable to slide further to retest November 2020 swing lows.

The EUR/GBP cross witnessed some heavy selling for the fourth consecutive session on Tuesday and continued losing ground through the mid-European session. The momentum dragged the cross to fresh monthly lows, with bears now eyeing some follow-through weakness below the 0.8935-30 region.

With oscillators on the daily chart holding in the negative territory and still far from being in the oversold zone, a convincing break will be seen as a fresh trigger for bearish traders. This, in turn, might turn the EUR/GBP cross vulnerable to weaken further below the 0.8900 round-figure mark.

The next relevant target for bearish traders is pegged near November swing lows, around the 0.8860 region, which has been acting as a strong base for the EUR/GBP cross since June 2020. Failure to defend the mentioned support level should pave the way for an extension of the downward trajectory.

Meanwhile, technical indicators on hourly charts are already flashing oversold conditions and warrants some near-term consolidation or a modest bounce before the next leg down. That said, any attempted recovery is more likely to remain capped near 200-day SMA, around the 0.8980-85 region.

A subsequent move back above the key 0.9000 psychological mark might negate the near-term bearish outlook and prompt some short-covering move. The EUR/GBP cross might then climb further towards the 0.9055-60 intermediate resistance en-route the next major hurdle, just ahead of the 0.9100 mark.

EUR/GBP 4-hourly chart


Technical levels to watch