EUR/GBP retreats from 2-1/2 month tops

The EUR/GBP cross corrected from closer to 2-1/2 month highs touched on Friday and is currently placed at session lows around mid-0.8700s.

With markets looking beyond another terrorist attack in the UK over the weekend, a modest GBP recovery failed to assist the cross to build on early up-move. Adding to this, a softer-tone surrounding the EUR/USD major, primarily led by a modest US Dollar recovery, further prompted traders to refrain from initiating any fresh bullish positions.  

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Today's release of final Euro-zone PMI prints are more likely to be a non-event amid lighter trading conditions in wake of a bank holiday in Germany and France. From the UK, the release of UK services PMI might provide some impetus, albeit is unlikely to be a game-changer for the cross.

Investors this week would remain focused on the pivotal UK general election and ECB meeting, which would now be the next fundamental triggers for the pair's near-term trajectory. 

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Technical levels to watch

From current levels, immediate support is pegged near 0.8720 region, below which the corrective slide could get extended towards 0.8690 support en-route 0.8655-50 strong support. 

On the upside, 0.8765-70 area now seems to have emerged as immediate resistance, which if conquered now seems to lift the cross beyond the 0.8800 handle towards its next major hurdle near 0.8825-30 zone.