EUR/GBP breaks through 0.7600 support as Pound surge

After attempting a recovery from 0.7600 handle to 0.7626, the EUR/GBP pair reversed sharply and has now broken through 0.7600 handle.

Earlier during European session, the EUR/GBP pair found support near 0.7600 round figure mark from slightly better-than-expected German Ifo Business Climate index that rose to 107.7 in May from 106.7 recorded in April and was better than consensus estimates of a rise to 106.9.

The pull-back from 0.7600 handle, however, was short-live and as the GBP/USD pair broke through 1.4660-65 supply region, the EUR/GBP pair fell sharply to currently trade below 0.7600 level at 0.7585. A sustained weakness below 0.7600 is likely to increase the pair's vulnerability to continue drifting lower.

Technical levels to watch

From current levels, the pair seems to extend its depreciating move immediately towards 0.7550-45 support area, marking Fed. month daily closing lows. The fall could further get extended towards the very important 200-day SMA support near 0.7520-15 area.

Meanwhile on the upside, the pair now need to build on to its recovery move above 0.7625 in order to stage additional recovery towards 0.7665 region, which now seems to act as immediate strong resistance. Only a sustained strength above 0.7665 resistance might negate the bearish bias and assist the pair to reclaim 0.7700 handle and climb higher in the near-term.