EUR/GBP clings to recovery gains, rises to session high at 0.8540

Following a dip below 0.8500 handle on Wednesday, the EUR/GBP cross stall its three consecutive days of losing streak and is now extending its recovery gains to currently trade at a fresh session high around 0.8540 region. 

A modest recovery in the shared currency, despite of disappointing German IFO Business Climate index, provided an initial boost. Moreover, a broad based retracement in the British Pound is also extending support for the cross to extend its recovery from over 2-week low level touched yesterday. 

From technical perspective, the cross is rebounding from 50% Fibonacci retracement level of 0.8249-0.8725 up-leg and is currently trading close to 38.2% Fibonacci retracement level. Hence, a follow through up-move would suggest that the ongoing slide is likely to be short-lived and the post-Brexit up-trend is still intact. 

Technical levels to watch

From current levels, 0.8565-70 area seems to act as immediate resistance, above which the recovery momentum is likely to get extended towards 23.6% Fibonacci retracement level resistance near 0.8600 round figure mark. On the flip side, sustained weakness back below 0.8500 psychological mark, leading to a break below Wednesday's low near 0.8490, is likely to accelerate the fall immediately towards 61.8% Fibonacci retracement level support and eventually towards testing sub-0.8400 handle nearing 50-day SMA.