EUR/GBP bounces off 0.8300 level, still down for fifth straight session

The EUR/GBP cross is attempting a tepid recovery from 0.8300 handle and has now recovered around 30-pips from session low to currently trade near 0.8330 level.

The pair on Tuesday fell sharply as sentiment surrounding the British Pound continued to improve on news that Theresa May will succeed as the next Prime Minister of UK. Strong short-covering rally boosted the GBP/USD major to 1.3300 handle and the EUR/USD pair continued with its underperformance, sending the EUR/GBP cross spiraling lower. 

The pair continued trading week on Wednesday, for fifth consecutive session, but has managed to bounce of 0.8300 handle as traders now turn cautious ahead of Thursday's BOE monetary policy decision. Given that the central bank is more likely to announce an interest-rate cut on Thursday, the EUR/GBP cross is more likely to hold and stabilize around 0.8300 handle.

Technical levels to watch

On a sustained drop below 0.8300 level, the pair seems to continue drifting lower towards 0.8220-0.8200 region, marking 38.2% Fibonacci retracement level of Brexit-led sharp up-surge. On the flip side, recovery momentum now seems to confront immediate resistance at 23.6% Fibonacci retracement level, previous support, near 0.8375-80 region, above which the cross could be headed back towards 0.8500 psychological mark.