- EUR/GBP surrendered early gains and dropped to fresh session lows in the last hour.
- The set-up supports prospects for the emergence of some dip-buying at lower levels.
- The overnight swing low, around the 0.8910 region, should act as important support.
The EUR/GBP cross struggled to capitalize on its early gains and dropped to fresh session lows in the last hour, retreating around 40 pips from daily highs near the 0.8990 region. The intraday pullback comes on the back of the recent repeated failures to sustain above the key 0.9000 psychological mark and points to persistent selling bias at higher levels.
Meanwhile, technical indicators on the daily chart maintained their bullish bias and support prospects for the emergence of some dip-buying, which should help limit deeper losses. The positive outlook is further reinforced by the fact that oscillators on hourly charts – though have been losing positive momentum – are yet to confirm any near-term bearish bias.
Hence, any subsequent fall might still be seen as a buying opportunity near the overnight swing low, around the 0.8910 region. This is closely followed by the 0.8900 round-figure mark, which if broken might turn the cross vulnerable to accelerate the fall further towards an important resistance breakpoint-turned support, around the 0.8865 horizontal zone.
On the flip side, bulls are likely to wait for some strong follow-through buying beyond the 0.9000 mark before positioning for any further appreciating move. The cross might then aim towards testing May monthly highs resistance near the 0.9050-55 region. The momentum could get extended further and assist the cross to reclaim the 0.9100 round-figure mark.
EUR/GBP 4-hourly chart
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Technical levels to watch
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