Bears targeting mid-0.8700s, 61.8% Fibo./200-DMA confluence support

EUR/GBP meets with some fresh supply on Thursday and slides below the 0.8800 mark.
The near-term technical set-up supports prospects for an extension of the bearish trend.

The EUR/GBP cross met with some fresh supply on Thursday and slipped below the 0.8800 round-figure mark, back closer to three-week lows during the early European session.

Given last week’s break below the key 0.90 psychological mark, the pair’s inability to capitalize on the attempted bounce suggests that the recent downtrend might still be far from being over.

This coupled with the fact that the cross has found acceptance below the 50% Fibonacci level of 0.8282-0.9500 upsurge further supports prospects for a further depreciating move.

Meanwhile, oscillators on the daily chart maintained their bearish bias and have also recovered from slightly oversold conditions on the 1-hourly chart, adding credence to the negative outlook.

The set-up seems tilted firmly in favour of bearish traders and hence, some follow-through weakness, towards testing 61.8% Fibo. level near mid-0.8700s, now looks a distinct possibility.

The latter coincides with the very important 200-day SMA, which if broken should pave the way for an extension of the recent sharp decline from the 0.9500 mark, or multi-year tops.