FxWirePro: EUR/GBP struggles for direction above cloud support, additional BoE rate hike hopes underpin the British Pound

Chart - Courtesy Trading View 

EUR/GBP was trading 0.14% lower on the day at 0.8813 at around 12:30 GMT, down from session highs at 0.8835.

Expectation for additional BoE rate hikes underpin the British Pound and act as a headwind for the pair.

The single currency also under some selling pressure after downbeat Euro area Economic Sentiment Index, trades muted.

The data published by the European Commission earlier on Monday showed Euro area Economic Sentiment Indicator edged lower to 99.7 in February from 99.8 in January, missing forecasts at 101.

Further, the Economic Sentiment Indicator for the larger European Union remained unchanged at 97.8.

Details of the report showed the Industrial Confidence in the Euro area declined to 0.5 from 1.2, the Services Sentiment advanced to 9.5 from 1.4 and the Consumer Confidence Index came in at -19, matching the flash estimate.

The pair has snapped a three-day upside and has slipped lower to test 5-DMA support at 0.8809. 21-EMA caps upside in the pair.

Stochs and RSI are biased lower, momentum is with the bears. Further a bearish RSI divergence raises scope for more weakness.

Support levels - 0.8809 (nearly converged cloud top, 5-DMA and 55-EMA), 0.8750 (110-EMA)

Resistance levels - 0.8836 (21-EMA),0.8858 (20-DMA)

Summary: EUR/GBP trades with a bearish bias. Break into cloud will drag the pair lower.