#EURGBP @ 0.87028 turns lower for the fifth straight day and drops to over a one-week low on Monday. (Pivot Orderbook analysis)

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• EUR/GBP turns lower for the fifth straight day and drops to over a one-week low on Monday.
• UK government withdraws tax cut plan, which boosts sterling and exerts pressure on the cross.
• Recession fears, modest USD strength weighs on the euro and contributes to the offered tone.

The pair currently trades last at 0.87028.

The previous day high was 0.885 while the previous day low was 0.8752. The daily 38.2% Fib levels comes at 0.879, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8813, expected to provide resistance.

The EUR/GBP cross attracts fresh selling following an early uptick to the 0.8830 region and turns lower for the fifth successive day on Monday. Spot prices drop to over a one-week low during the mid-European session, with bears now awaiting sustained weakness below the 0.8700 round-figure mark.

UK Finance minister Kwasi Kwarteng takes a U-turn on Monday and confirms that his government will not go ahead with a plan to cut the top rate of income tax from 45%. This, in turn, is seen as a key factor behind the British pound’s relative outperformance against its European counterpart and exerting downward pressure on the EUR/GBP cross.

The shared currency, on the other hand, is undermined by speculation of a potential recession in the region amid the risk of a further escalation in the Russia-Ukraine conflict. This, along with a modest US dollar strength, weighs on the euro and contributes to the offered tone surrounding the EUR/GBP cross, supporting prospects for further losses.

That said, a bleak outlook for the UK economy might hold back the GBP bulls from placing aggressive bets and lend some support to the EUR/GBP cross, at least for the time being. Nevertheless, spot prices have retreated over 500 pips from a two-year high, around the 0.9235 region touched in September and seem vulnerable to prolonging the descending trend.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8709 at the time of writing. Pair opened at 0.8778 and is trading with a change of -0.79 % .

The pair is trading below its 20 Daily moving average @ 0.8756, above its 50 Daily moving average @ 0.8578 , above its 100 Daily moving average @ 0.8557 and above its 200 Daily moving average @ 0.8468

The previous day high was 0.885 while the previous day low was 0.8752. The daily 38.2% Fib levels comes at 0.879, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8813, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8737, 0.8695, 0.8639
• Pivot resistance is noted at 0.8835, 0.8892, 0.8933

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