EUR/GBP slide further below 0.9000 psychological mark

The EUR/GBP cross turned sharply lower on Wednesday and is now extending its slide further below 0.9000 psychological mark.

Currently trading around 0.8980-85 region, the cross reversed all of its gains recorded on Tuesday amid broad based GBP recovery on easing fears of 'hard Brexit'. The British Pound on Wednesday strengthened after a report (via Bloomberg) stated that British Prime Minister Theresa May has accepted holding a parliamentary vote on her plan for ending UK's association with the European Union. The report triggered a sharp GBP short-covering move across the board and the cross once again failed to sustain its strength above 0.9100 handle.

Meanwhile, an offered tone around the EUR/USD pair, now dropping to the lowest level since July 27, exerted additional selling pressure and dragged the cross back below 0.9000 handle.

With an empty economic docket on Wednesday, BOE Deputy Governor Jon Cunliffe's testimony on the effect of the Brexit on financial services before the Financial Affairs Sub-Committee will take the centre stage and would drive the cross further from current levels.

Technical levels to watch

A follow through selling pressure below 0.8965 immediate support is likely to accelerate the slide immediately towards 0.8935 support ahead of a support near 0.8900 handle. Meanwhile on the upside, 0.9000 mark now becomes immediate resistance above which the cross might head back towards 0.9045 resistance before making a fresh attempt towards reclaiming 0.9100 handle.