EUR/GBP slides to fresh session lows, further below mid-0.8600s

A modest USD rebound exerted pressure on the euro and prompted some selling around EUR/GBP.
The upbeat UK economic outlook underpinned the pound and further contributed to the selling bias.

Haresh Menghani FXStreet

The EUR/GBP cross maintained its offered tone through the mid-European session and dropped to fresh daily lows, around 0.8630 region in the last hour.

The cross witnessed some selling during the second half of the trading action on Wednesday and moved further away from over two-week tops, around the 0.8670 region touched in the previous session. The shared currency's relative underperformance lacked any obvious fundamental catalyst and could be solely attributed to a modest US dollar rebound from multi-month lows.

On the other hand, the British pound remained well supported by the optimistic outlook for the UK economic recovery amid the gradual easing of lockdown measures. The impressive pace of coronavirus vaccinations, along with the effectiveness of COVID-19 vaccines against the Indian variant, bodes well with the UK government's plan to end restrictions fully on June 21.

The combination of factors exerted some downward pressure on the EUR/GBP cross, though fears over the long-term impact of Brexit might help limit any further losses. This makes it prudent to wait for some strong follow-through selling before confirming that the recent positive move has run out of steam and positioning for any meaningful slide amid absent relevant economic releases.

Nevertheless, the EUR/GBP cross, for now, seems to have snapped two consecutive days of the winning streak and erased a major part of the overnight gains. The 0.8625-20 region might act as immediate support ahead of the 0.8600 mark, which if broken decisively might prompt some technical selling and accelerate the slide towards monthly swing lows, around the 0.8560 region.

Technical levels to watch

EUR/GBP

Overview
Today last price	0.8638
Today Daily Change	-0.0018
Today Daily Change %	-0.21
Today daily open	0.8656

Trends
Daily SMA20	0.8638
Daily SMA50	0.8624
Daily SMA100	0.8692
Daily SMA200	0.8865

Levels
Previous Daily High	0.8672
Previous Daily Low	0.8619
Previous Weekly High	0.8643
Previous Weekly Low	0.8582
Previous Monthly High	0.872
Previous Monthly Low	0.8472
Daily Fibonacci 38.2%	0.8652
Daily Fibonacci 61.8%	0.8639
Daily Pivot Point S1	0.8626
Daily Pivot Point S2	0.8596
Daily Pivot Point S3	0.8574
Daily Pivot Point R1	0.8679
Daily Pivot Point R2	0.8702
Daily Pivot Point R3	0.8732

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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