EUR/GBP drops to 2-week low, inching closer to 0.8600 handle

Having posted a session high near 0.8665 region, the EUR/GBP cross ran through fresh offers and dropped to the lowest level since Jan. 9.

Receding worries of a 'hard Brexit', after last week's speech by UK PM Theresa May, continues to underpin the British Pound and has been the exclusive driver of the pair's near-term movement. Brexit news would continue to dominate the headlines as markets now look forward to tomorrow's UK Supreme Court ruling on whether Parliament approval is required to trigger Article 50. 

Meanwhile, a mild retracement in the EUR/USD major also collaborated to the pair's offered tone on Monday and build on last week's sharp reversal from over two-month tops. At the time of writing, the cross was trading around 0.8615 region, having posted a session low at 0.8606 level. 

Speech from the ECB President Mario Draghi would now be looked upon for some fresh trading impetus ahead of flash Euro-zone PMI prints on Tuesday. However, the release of advanced UK Q4 GDP Print on Thursday would be the most significant economic data influencing the pair's next leg of directional move. 

Technical levels to watch

On a sustained break below 0.8600 handle, the cross seems vulnerable to head back towards 50-day SMA support near 0.8530 region with 0.8580-75 zone providing some intermediate support. On the upside, decisive move above 0.8655-60 immediate hurdle has the potential to lift the cross towards 0.8700 handle ahead of its next major hurdle near 0.8725-30 region.