EUR/GBP tumbles over 130-pips from 6-week peak
|The EUR/GBP cross faded early Asian session spike to the highest level since mid-Nov. and turned sharply lower, reversing around 135-pips from session peak.
Currently trading around 0.8520 region, the cross came under intense selling pressure amid a strong short-covering rally witnessed around the GBP/USD major. The EUR/USD major's inability to regain traction, after Asian flash surge, has failed to lend any support and hinder the pair's vertical decline from 6-week highs.
With today's sharp reversal from 50-day SMA, the cross has virtually erased all of its weekly gains and given the intensity of move, it could possibly even break back below 0.8500 psychological mark.
Technical levels to watch
A follow through selling pressure below 0.8500 mark is likely to accelerate the slid further towards 0.8455-50 horizontal support, en-route 0.8400 round figure mark. On the upside, 0.8550 level now becomes immediate strong hurdle, which if cleared is likely to assist the cross back towards 0.8600 handle. A follow through up-move beyond 0.8600 resistance might now negate any near-term bearish bias and lift the cross, beyond 50-day SMA, towards its next major resistance near 0.8675 level.
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