EUR/GBP faded a bullish spike to 7-week tops

The EUR/GBP cross faded a knee-jerk bullish spike to 7-week tops near 0.8670 level and has now dropped to fresh session low near 0.8625-30 band.

The shared currency came under some renewed selling pressure on the first trading day of the week after former French Prime Minister Alain Juppe said he won’t enter the race for the Presidency, which eventually reduced possibilities of anti-euro candidate Marine Le Pen being eliminated in the first round of voting.

The announcement triggered a fresh wave of sell-off in the French bonds, with the yield premium over German bunds widening and weighing on the shared currency across the board. 

Meanwhile, an offered tone around the British Pound, amid persistent Brexit worries, seems to be lending some support and helped the cross to hold above the 0.8600 handle, and 100-day SMA resistance turned support.

Investors this week would remain focused on the ECB monetary policy meeting on Thursday, where the central bank is not expected to make any changes to its monetary policy.

Technical levels to watch

A follow through retracement below 100-day SMA immediate support near 0.8610 region is likely to accelerate the slide towards 0.8580-75 intermediate support ahead of 0.8545 strong support. On the upside, a fresh leg of up-move beyond 0.8640 region should now lift the cross beyond 0.8670 resistance towards reclaiming 0.8700 round figure mark.