EUR/GBP flirting with near two-month low near mid-0.8400s

After yesterday's brief pause, the EUR/GBP cross came under some renewed selling pressure and dropped to near two-month through, the lowest level since Feb. 24.

The pair's latest leg of downslide has been primarily led by a strong follow through buying interest surrounding the British Pound, with the GBP/USD major hitting fresh 3-week tops near the 1.2600 handle. 

Today's move lacked any fundamental drivers, and hence, nervousness ahead of the upcoming French Presidential election on April 23rd could also be attributed to the weaker sentiment surrounding the EUR/GBP cross. 

The prevalent nervousness is further reinforced by a subdued range-bound price-action around the EUR/USD major, which has failed to extend any immediate support and stall the EUR/GBP pair's ongoing downslide to eight week lows. 

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The bearish pressure, however, seems to have halted near mid-0.8400s and the cross has now recovered few pips to currently trade around 0.8565 region. 

Investors might continue to refrain from buying the Euro and hence, it would interesting to see if the cross is able to register any meaningful / sustainable recovery move or any up-move is utilized to initiate fresh bearish bets. 

With no relevant economic data due for release, political headlines surrounding the upcoming French election might continue to influence sentiment surrounding the shared currency and drive the cross on Tuesday.

Technical levels to watch

On a sustained break below 0.8450 level, the cross is likely to aim towards 0.8425 intermediate support ahead of the 0.84 handle. On the upside, any recovery move beyond 0.8475 level is likely to confront strong resistance at the key 0.85 psychological mark, which if cleared might trigger a short-covering rally towards 0.8525-30 horizontal resistance.