EUR/GBP Slides to Two-Week Lows Amid Risk-Off Market Mood

The EUR/GBP currency pair has been trading within a narrow range, hovering near two-week lows around 0.8540 after a sharp reversal last Friday. The Euro was hit harder than the Pound by Federal Reserve Chairman Kevin Warsh's hawkish message at Jackson Hole, which boosted hopes of upcoming interest rate hikes.

The risk-off market mood, fueled by rising tensions in Iran and crude prices, is capping Euro rallies for now. Bears are eyeing the August 12 low at 0.8531 as key support, with a break below this level confirming a multiple top between 0.8575 and 0.8585.

Momentum indicators have slid into negative levels, with the Relative Strength Index (14) around 40 hinting at modest bearish momentum. On the upside, Friday's top at 0.8576 and the July and August peak near 0.8585 are likely to pose significant resistance for bulls.