EUR/GBP drops to session low near 0.8530, reverses Friday’s up-move

The EUR/GBP cross came under some renewed selling pressure on Monday and reversed all of its up-move witnessed on Friday. 

The British Pound gained some traction on Monday, with the GBP/USD major staging a goodish recovery from nearly three-week lows, and attracting some fresh selling pressure around the cross. 

Adding to this, persistent selling pressure around the shared currency, against the backdrop of recent ECB headlines and last week's dovish comments by the ECB President Mario Draghi, failed to assist the cross to build on last week's first positive weekly close for the first time in four weeks. 

Meanwhile, looking at the broader picture the cross has been repeatedly finding some buying interest around the key 0.8500 psychological mark, but any recovery attempts have failed to lift it back above the very important 200-day SMA support, turned immediate resistance near 0.8590 region. Hence, it would be prudent to wait for a decisive break through this near-term trading range before committing to the next leg of directional move for the cross. 

Technical levels to watch

Currently trading around 0.8530 region, any further downslide might continue to find immediate support near 0.8510-0.8500 region, below which a fresh leg of weakness is likely to drag the cross towards 0.8460-55 support ahead of 0.8425-20 horizontal support. 

On the upside, any recovery move beyond 0.8555-60 immediate resistance might again run through some fresh offers near 0.8580-90 region (200-day SMA), which if conquered should trigger a short-covering rally towards mid-0.8600s.