EUR/GBP Price Forecast: Bears are pushing against the 0.8660 support area

• The Euro extends losses against the pound, weighed down by France's political crisis..
• Bears are testing lows at 0.8660 with technical indicators showing an increasing bearish pressure.
• The pair remains trading within an expanding wedge, with its bottom at 0.8640.

The Euro is heading lower against the British Pound on Tuesday. The pair has retraced the last two days' recovery and is extending last week's reversal from 0.8710 highs to levels near 0.8660 so far.

Investors' concerns about the political crisis in France are weighing on the common currency. Prime Minister, François Bayrou, was toppled on Monday after a widely expected defeat on a confidence vote, amid generalised opposition to his plans to cut spending.

Technical analysis: Supports are at 0.8660 and 0.8640

The technical picture shows the Euro coming under growing bearish pressure against the GBP. The 4-hour RSI has broken below the 50 level and the MACD remains below the signal level.

Price action remains moving within an expanding pattern, a figure that often appears after major tops. Bears are now testing the September 4 land 8 lows in the 0.8660 area, ahead of the wedge bottom, which is now at 0.8640. Further down, the next target would be the August 14 low, at 0.8600.

To the upside, bulls have been contained below the September 5 high of 0.8685, ahead of the September 2 and 3 highs, at the 0.8710-0.8715 area and the wedge top, which is now crossing the August 7 and July 28 highs, at the 0.8745-0.8755 area.