• Struggles to sustain above 0.8900 handle.
• Long-unwinding turning out to be a key drag.
The EUR/GBP cross extended overnight retracement slide from one-month tops and remained heavily offered through the mid-European session.
The cross has now snapped four consecutive days of winning streak and in absence of any fresh development, the fall could be solely attributed to some technical selling.
Against the backdrop of recent repeated failures to sustain its strength above the 0.8900 handle, traders seemed inclined to unwinding their long positions and seems to be the only factor dragging the cross lower.
The cross, however, seems to have found some support at the very important 200-day SMA, near the 0.8870-65 region, which if broken might negate any near-term bullish bias.
There aren't any major market-moving economic releases due on Thursday and hence, investors' focus would remain glued on the upcoming Friday's release of UK monthly retail sales, which might provide some fresh directional impetus.
Technical levels to watch
Immediate support below 200-day SMA is pegged near mid-0.8800s (100-day SMA), which if broken might continue dragging the cross towards 0.8830 intermediate support en-route the 0.8800 handle. On the upside, any meaningful up-move back above the 0.8900 handle might continue to confront resistance near the 0.8920 region, above which the cross seems all set to head towards challenging 0.8960 supply zone.
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