As long as we remain below this level and the key moving averages, the bias is for euro weakness. The bearish cross of the 50- and 200-day moving average adds weight to this argument.
The potential for a short squeeze remains in light of last week’s bullish candle, which may see the 50-day moving average tested. A break and daily close below the £0.8380 level will bring this month’s EUR/GBP lows around £0.8350 into sight once again. A break of this level takes the pair back to the £0.8280 zone – the 50% retracement of the July 2012/February 2013 entire move.