EUR/GBP slides to 4-week lows ahead of UK CPI

The British Pound continued with its relative outperformance against the shared currency and dragged the EUR/GBP cross to its lowest level since mid-August.

Currently trading around 0.9065 level, the cross maintained its offered tone for the third consecutive session and has now retreated nearly 250-pips from nearly a decade high touched late August. 

The British Pound gained some fresh traction on Tuesday and was being supported by the latest positive development, wherein the UK Parliament passed the EU Withdrawal Bill by 326 to 290 votes and a motion limiting scrutiny of the bill to 8 days. 

Moreover, speculations that the BoE could sound more hawkish on interest rates, when it announce the latest monetary policy decision later this week, remained supportive for the prevalent positive sentiment around the British Pound. 

Meanwhile, a modest uptick in the EUR/USD major, amid some renewed US Dollar weakness, helped limit further losses, at least for the time being. 

The cross would remain in focus on Tuesday as traders now look forward to the latest UK inflation figures, which could have potentially have an impact on the BoE's monetary policy outlook.

   •  UK: Upside risk for today’s inflation data - TDS

Technical levels to watch

A follow through selling pressure could extend the corrective slide towards 0.9045-40 intermediate support en-route the key 0.90 psychological mark.

On the flip side, any recovery attempts might now confront fresh supply near the 0.9100 handle, above which a bout of short-covering could lift the cross towards 0.9125-30 horizontal resistance.