- EUR/GBP witnessed a dramatic intraday turnaround from a one-month-old descending trend-line.
- The set-up favours bearish traders and supports prospects for a further near-term depreciating move.
- Only a sustained move beyond the mentioned trend-line resistance will negate the negative outlook.
The EUR/GBP cross extended its sharp intraday pullback from weekly tops and dived to fresh session lows, around the 0.9020 region in the last hour.
The intraday momentum faltered near a resistance marked by a one-month-old descending trend-line, with bears now looking to extend the momentum further below 100-day SMA. The mentioned support coincides with one-month lows touched on Tuesday, which if broken decisively will be seen as a fresh trigger for bearish traders.
Meanwhile, technical indicators on the daily chart have just started drifting into the negative territory and support prospects for additional weakness amid a strong pickup in demand for the British pound. Some follow-through selling below the key 0.9000 psychological mark will add credence to the bearish outlook.
The EUR/GBP cross might then accelerate the fall towards the 0.8965 intermediate support before eventually dropping to the 0.8635 intermediate support en-route the 0.8900 round-figure mark.
On the flip side, immediate resistance is now pegged near the 0.9070 horizontal zone. A sustained move beyond has the potential to lift the EUR/GGP cross back above the 0.9100 mark, towards retesting the mentioned trend-line resistance, currently around the 0.9130 region.
Some follow-through buying will negate any near-term bearish bias and assist the EUR/GBP cross to climb further, towards reclaiming the 0.9200 mark for the first time since September 23.
EUR/GBP daily chart
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Technical levels to watch
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