The EUR/GBP cross extended previous session’s reversal move from two-week highs and dropped to refresh weekly low.
Spot remained under some selling pressure for the second consecutive day as traders seemed inclined to lock-in some profits, especially after repeated failed attempts to sustain its move beyond the key 0.85 psychological mark.
Adding to this, nervousness ahead of the next big event risk – ECB monetary policy decision, might have also prompted some position readjustment and further collaborated to pair’s slide below Monday’s weekly lows.
Meanwhile, positive sentiment surrounding the British Pound, with the GBP/USD major now placed near yearly tops around the 1.2900 handle, further supported the heavily offered tone surrounding the cross.
Investors’ focus on Thursday will remain glued to the ECB policy announcement, which has the potential to make or break the shared currency and trigger a fresh bout of volatility across Euro crosses. On the economic data front, the preliminary release of German CPI print for April would be looked upon to grab some short-term trading opportunities.
Technical levels to watch
A follow through selling pressure has the potential to continue dragging the pair further towards its next support near 0.8415-10 zone ahead of 0.8380 support. On the flip side, any recovery attempt might now confront immediate resistance near 0.8475-80 region, above which the cross is likely to surpass the 0.8500 handle and aim back towards two-week highs resistance near 0.8530 level.