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  • EUR/GBP consolidated the recent slide to five-week lows.
  • The near-term bias remains tilted in favour of bearish traders.

The EUR/GBP cross remained confined in a three-day-old narrow trading band around the 0.8700 mark and consolidated the recent losses to five-week lows.

The pair’s inability to register any meaningful recovery points to the lack of buying interest and supports prospects for a further near-term depreciating move.

The negative outlook is further reinforced by the fact that the cross this week confirmed a bearish break below an important confluence region near the 0.8750 region.

The mentioned support comprised of 61.8% Fibonacci level of the 0.8282-0.9500 upsurge and 200-day SMA, which should act as a key pivotal point for bearish traders.

Moreover, technical indicators on the daily chart maintained their negative bias and are still far from being in the oversold territory, adding credence to the bearish set-up.

Hence, some follow-through weakness towards mid-0.8600s, en-route the 0.8620 region and March monthly swing lows (sub-0.8600 levels), now looks a distinct possibility.

On the flip side, any attempted recovery might continue to confront some supply near the mentioned support break-point, which if cleared might trigger some short-covering move.

However, any subsequent recovery seems more likely to run out of the steam and remain capped near the 0.8800 mark, which is closely followed by the 0.8820 horizontal resistance.

EUR/GBP daily chart

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