Bears eye 16-month-old support ahead of UK CPI

EUR/GBP stays depressed near the intraday low, prints four-day downtrend.
UK CPI expected to print downbeat figures in January.
Sustained trading below 61.8% Fibonacci retracement suggests further downside to the key support.
Corrective pullback may gain support from oversold RSI.

EUR/GBP bears attack intraday low near 0.8700 threshold while heading into Wednesday’s European session open. In doing so, the quote remains heavy around the lowest since May 2020 after the four-day declines.

Also portraying the EUR/GBP vulnerability for the downside is the pair’s weakness below 61.8% Fibonacci Retracement level of December 2019 to March 2020 upside.

However, oversold RSI conditions as well as the pre-UK data cautious mood probe the EUR/GBP sellers.

Read: When are the UK CPIs and how could they affect GBP/USD?

While the extended downside to a horizontal area comprising multiple levels marked since October 2019 becomes imminent, around 0.8670, further weakness will target January 200 top near 0.8595.

Alternatively, recovery moves need to cross the key Fibonacci retracement hurdle of 0.8745 before convincing buyers to retake the 0.8800 levels.

Also, highlighting the importance of the 0.8800 threshold is the 21-day SMA, a break of which will challenge the monthly top surrounding the 0.8860.