EUR/GBP slides for fourth consecutive day, drops to session low near 0.8420

Extending its slide further below 0.8500 handle, the EUR/GBP cross dropped to a fresh 5-day low level of 0.8420 as the British Pound continues to gain traction on easing political uncertainty in the UK.

In the post-Brexit recovery, the British Pound has outperformed its European counter part, with the EUR/GBP cross struggling to sustain its move above 0.8600 handle. 

Moreover, sterling has managed to gather strong buying interest since Monday after Conservative MP Andrea Leadsom quite the race to succeed Prime Minister David Cameron, leaving Home Secretary Theresa May as the only contender. 

The British pound gained further traction after BOE Governor Mark Carney, during his testimony before the Treasury Select Committee, failed to provide any definitive cues over the prospects of a rate-cut announcement following MPC meeting on Thursday. 

Technical levels to watch

From current levels 0.8400-0.8390, marking 23.6% Fibonacci retracement level of Brexit-led sharp up-move remains immediate support to defend, which if broke is likely to extend the pair's near-term corrective move immediately towards 0.8280 horizontal support ahead of 38.2% Fibonacci retracement level support near 0.8230 region. Meanwhile on the upside, 0.8500 handle now turns immediate resistance and is immediately followed by horizontal resistance near 0.8530 level. Any follow through buying interest might get exhausted around 0.8580 strong resistance, which if conquered decisively would pave way for further near-term appreciating move for the pair.