EUR/GBP bounces off 0.89 mark, still in red for second straight session

Haresh Menghani FXStreet

The EUR/GBP cross traded with a bearish bias for the second consecutive session on Monday but has managed to find some support near the 0.8900 handle.

The cross extended Friday's sharp rejection slide from the key 0.90 psychological mark and was being weighed down by Spanish political uncertainly. Catalonian independence was seen taking tool of the shared currency and has been one of the key factors weighing on the cross.

• Spain to face possible slowdown in the economy and fiscal slippage - HSBC

However, persistent USD demand kept the GBP/USD major on the back-foot and helped limit deeper losses, with the cross rebounding around 15-pips from session lows to currently trade around the 0.8915 region.

Traders would now take cues from the release of EU consumer confidence index for the month of Oct. Meanwhile, any fresh political news coming out of Spain would continue to infuse some volatility across Euro crosses and provide short-term trading opportunities ahead of the UK GDP figures on Wednesday and the highly anticipated ECB monetary policy decision on Thursday.

Technical levels to watch

On a sustained break below the 0.8900 handle, the cross is likely to accelerate the slide towards 0.8855 strong horizontal level with some intermediate support near the 0.8875 region.

Conversely, a sustained recovery back above 0.8925 level has the potential to lift the cross back towards 0.8965 resistance en-route the 0.9000 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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