FxWirePro: EUR/GBP extends previous week's retracement, slumps over 0.32%

EUR/GBP chart - Trading View 

Technical Analysis: Bias Bearish

- EUR/GBP opened the week on a bearish note, extends previous week's pullback

- The pair slumped over 0.32% and was trading at 0.8535 at around 11:40 GMT

- Death Cross on the weekly charts keeps bias lower, price action was rejected at 21-week EMA

- Stochs and RSI have turned bearish on the daily charts, the pair has retraced back into daily cloud

- GMMA indicator shows major bias on the weekly charts is bearish

Support levels - 0.8515 (Lower BB), 0.85 (Sept lows), 0.8470 (Trendline)

Resistance levels - 0.8575 (21-week EMA), 0.8583 (110-EMA), 0.8602 (Upper BB)

Summary: Heavy selling around the shared currency dragged the EUR/GBP cross lower. The centre-left Social Democrats (SPD) registered a narrow victory over incumbent Chancellor Angela Merkel’s party in a closely contested German election on Sunday.

On the other side, upbeat market mood and last week's BOE hawkishness keeps the pound buoyed. That said, Brexit-related shortages of petrol in the UK could weigh on the Sterling, keeping downside in the pair limited.

EUR/GBP has been capped at 21-week EMA from many weeks. Technicals have turned bearish with scope for further downside. Test of trendline support at 0.86 likely.