- EUR / GBP witnessed strong selling pressure for the fourth consecutive session on Tuesday.
- The GBP benefited from the easing of the UK fuel crisis and an upward revision of the UK PMI.
- A stronger USD weighed on the euro and contributed to the ongoing downward trajectory.
The crossing EUR/GBP It fell near minimum three weeks for half of the European session, but managed to find some support near the 0.8500 psychological key level.
The cross extended its recent rejection slide from the very important 200-day SMA, levels just above 0.8650, and witnessed strong selling for the fourth consecutive session on Tuesday. The sterling outperformance comes amid signs of easing from the UK fuel crisis.
The government announced on Monday that the armed forces will begin delivering gasoline to garages across the UK. The Petrol Retailers Association, which represents nearly 5,500 of the UK’s 8,000 service stations, said the crisis is all but over in Scotland, Wales, the North and the Midlands.
Apart from this, an upward revision of the UK services PMI for September also acted as a tailwind for the British pound. In fact, the indicator ended at 55.4 for the reported month, compared to 54.6 for the flash estimate. In addition to this, the composite PMI was also revised to 54.9 from the preliminary reading of 54.1.
On the other hand, the shared currency was pressured by a modest rebound in demand for US dollars. Apart from this, a sustained break below the short-term rising trend line support, near the 0.8535 region, compounded the bearish pressure surrounding the EUR / GBP cross and contributed to the continued decline.
However, the oversold RSI (14) on the hourly charts prevented investors from making further bearish bets and helped the EUR / GBP cross defend the 0.8500 level, at least for now. The mentioned level coincides with the September monthly swing lows and should now act as a key point for short-term traders.
Technical levels
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