Renewed fears of contagion continue to rattle the European markets on Monday, pushing the EUR/GBP to a fresh nearly 4-week low at 0.8844 amid broad risk aversion. The pair dropped some 120 pips on Friday as Italian and Spanish risk premiums soared, and today sentiment remains by-and-large bearish as we head into mid-day over the session.
If the EUR/GBP continues to push lower further into the day, immediate support is projected at 0.8828 (Daily Low Jun 21), 0.8792 (61.8% of 0.8611-0.9084) and 0.8783 (100-Day MA). In the case of a reversal, resistance is placed at 0.8908 (21-Day MA), 0.8971 (10-Day MA) qand 0.9001 (Hourly High Jul 8).
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