EUR/GBP slides farther below 0.87 handle on Greece worries, German CPI next

Haresh Menghani FXStreet

The EUR/GBP cross remained heavily offered for the second consecutive session and extended its pull-back from near 2-1/2 month highs touched last Friday.

The latest news reports that Greece threatened to opt out of £7.5bn in debt repayments due in July, if Brussels blocked a debt deal at the next meeting of Euro-area minister on June 15th, was seen weighing heavily on the shared currency and has been a key driver of pair's retracement back below the 0.8700 handle.

Against the backdrop of incoming UK election polls, revealing a tighter race for the upcoming UK general election on June 8, and the latest Brexit developments, the already weaker sentiment surrounding the British Pound helped limited further losses, at least for the time being.

Moving ahead, traders on Tuesday would now take cues from the release of German prelim CPI print for May and with no macroeconomic data due for release from the UK, renewed worries over Greece's financial situation now seems to act as a key determinant of the pair's movement on Tuesday.

Technical levels to watch

A follow through weakness below 0.8675 level (session low), the cross is likely to accelerate the slide towards 0.8650-45 support en-route 0.8625-20 area. Meanwhile on the upside, any recovery move back above the 0.8700 handle now seems to confront resistance near 0.8725-30 region, which if cleared could lift the cross beyond Friday's swing high resistance near mid-0.8700s towards 0.8775 level ahead of the 0.8800 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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