EUR/GBP plummets to two-month low ahead of German Ifo and UK GDP

The EUR/GBP cross extended its reversal move from the vicinity of 0.8600 handle, touched last week, and tumbled to its lowest level since Dec. 21 during early European session on Wednesday.

Currently trading around 0.8425 region, the cross remained under intense selling pressure for the third consecutive session amid growing concerns over political developments in the Euro-zone. Investors remained worried about the prospects of Marine Le Pen winning the French Presidential election and withdrawing France out of the common trade bloc.

Traders now look forward to the release of German Ifo Business Climate index for Feb. for immediate respite for the shared currency.

Meanwhile, the British Pound remained a relative outperformer against its European counterpart as market participants await the release of revised UK GDP growth number for additional traction. Also in focus would be speech from BOE Deputy Governor Jon Cunliffe later during European session.

Technical levels to watch

From current levels, the downslide could get extended towards 0.8400-0.8390 strong support below which the cross is likely to head back towards 0.8335 horizontal support ahead of early Dec. lows support near 0.8300 round figure mark.

On the upside, 0.8450 level now seems to act as immediate resistance, which if cleared could lift the cross back towards 0.8500 psychological mark. Further up-move beyond 0.85 mark might continue to be capped at 50-day SMA strong hurdle near 0.8540 region.