EUR/GBP breaks through 20-DMA, dips below 0.8550

The EUR/GBP cross is seen extending its near-term corrective move for third consecutive session and has now dropped to fresh 2-week low, extending slide below 0.8550 level. 

The shared currency failed to benefit from better-than-expected final German GDP print for second quarter of 2016. Meanwhile, the British Pound continues to benefit from recent UK economic data that seems to have negated expectations of an immediate economic fallout post the historic Brexit referendum. 

Moreover, a broad based greenback recovery, especially against the shared currency, further contributed to the selling pressure surrounding the EUR/GBP cross, dragging it below 20-day SMA. 

Technical levels to watch

From current levels, 0.8518 (August 10 low) seems to provide some immediate support, below which the pair seems to immediate drop to 0.8500 psychological mark support. A follow through selling pressure, leading to a weakness below 0.8475, now seems to turn the pair vulnerable to extend its near-term corrective move. 

On the flip side, 20-day SMA support near 0.8545-50 region now turns immediate resistance. Sustained recovery back above 20-day SMA should assist the pair to aim back towards reclaiming 0.8600 strong resistance and only a decisive strength back above 0.8600 handle might now negate expectations of near-term corrective move.