EUR/GBP rally fizzles, slips back to 0.7900 handle

A sudden bout of buying interest around the British Pound, on rumors of the ICM 'Brexit' polls showing a 5 point lead to the 'Remain' camp, has now dragged the EUR/GBP back to 0.7900 handle.

Immediately after the news, the pair erased majority of its weekend poll results led sharp up-move to the vicinity of 0.8000 psychological mark and is now on the verge of moving into negative territory.

The British Pound continues to react with extreme volatility to every outcome on the upcoming UK-EU referendum on June 23, with the spill-over effect being felt around the EUR/GBP cross. Meanwhile, the uncertainty surrounding the referendum, the British Pound is unlikely to witness a sharp up-move, thus restricting a sharp downslide for the EUR/GBP cross.

Technical levels to watch

Sustained weakness below 0.7900 and a follow through selling pressure below session low level of 0.7880 might negate bullish bias, dragging the pair immediately towards 0.7850 horizontal support ahead of the very important 100-day SMA support near 0.7800 region. On the flip side, the pair now need to regain and sustain bullish momentum above 0.7950 resistance, above which the pair could make a fresh attempt to reclaim 0.8000 handle.