EUR/GBP rejected at 0.8500 mark, drops to fresh 2-month lows

Having faced rejection at 0.8500 psychological mark, the EUR/GBP cross reversed early tepid recovery gains and turned lower for third session in the previous four. 

Currently trading near 0.8465 region, marking the lowest level since Sept. 13, the British Pound extended Wednesday's gains, led by UK government's "Autumn Forecast Statement", which prioritized investments in infrastructure and also defended BoE's proactive decision to ease its monetary policy in an attempt to negate consequences of the historic Brexit vote. 

Meanwhile, the ongoing recovery momentum in the EUR/USD major, despite of a slight disappointment from German IFO business climate index seems to have limited further downslide for the time being. The German IFO business climate index ticked lower to 110.4 for November versus 110.5 expected and also recorded in October. 

From technical perspective, the cross is hovering around a short-term descending trend-line support, which if broken decisively would open room for continuation of the ongoing downslide from the vicinity of 0.9000 psychological mark. 

Technical levels to watch

From current levels, the short-term descending trend-line, near 0.8455-50 area, is likely to protect immediate downside below which the cross is likely to break below 0.8400 handle and test 0.8375 horizontal support. On the upside, 0.8500 handle now turns immediate hurdle, which if cleared decisively might trigger a short-covering bounce towards 0.8550-55 resistance area.