EUR/GBP corrects further from two-month tops, 0.89 mark at risk

   •  GBP boosted by today’s upbeat UK Feb. services PMI print.
   •  Italian election outcome keeps EUR bulls on the back-foot.

Having retested mid-0.8900s supply zone, or three-month tops, the EUR/GBP cross came under some intense selling pressure and has now snapped three consecutive days of losing streak.

The British Pound gained some positive traction across the board following the release of better-than-expected UK services PMI print, which rose to 54.5 in February and helped partly offset persistent uncertainty around the Brexit negotiations. 

Adding to this, the stalemate result of the Italian parliamentary elections over the weekend seems to have dampened the recent bullish sentiment and hence, did little to stall the pair's corrective slide back to the 0.8900 handle. 

It would now be interesting to see if bulls are able to regain control or the ongoing long-unwinding trade turns out to be a key dominant theme amid the latest political uncertainty in the Euro-zone. 

Technical levels to watch

A follow-through weakness below 0.8890 level could drag the cross back towards 100-day SMA support near mid-0.8800s. On the upside, 0.8930 level, closely followed by mid-0.8900s might continue to act as immediate resistance levels, above which a bout of short-covering could lift the cross towards reclaiming the key 0.90 psychological mark.