EUR/GBP extends previous session's sharp retracement from yearly tops

The EUR/GBP cross extended previous session's sharp pull-back from yearly tops and retreated over 100-pips over the past 24-hours.

Wednesday's surprisingly stronger UK labor market report prompted investors to take some profit off the table. This coupled with weaker sentiment surrounding the shared currency further collaborated to the pair's sharp corrective slide from mid-0.8900s.

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The cross extended overnight losses and held weaker for the second consecutive session through early European session amid a fresh bout of short-covering move around the British Pound. 

The British Pound's relative outperformance against its European counterpart could also be attributed to comments from the UK’s Junior Brexit Minister Baker, who was quoted saying, via Sky News, that the UK will not pay a penny more than needed for the Brexit bill.

Focus now shifts to BOE's Credit Conditions Survey report, due for release in a short while from now, which would be looked upon for some fresh impetus. 

Technical levels to watch

Immediate support is seen near 0.8815 level, below which the cross is likely to break below the 0.8800 handle and head towards testing its next support near 0.8770-60 region.

On the flip side, any up-move beyond mid-0.8800s might now confront fresh supply near 0.8875 region, which if cleared could lift the cross beyond the 0.8900 handle back towards 0.8925 horizontal resistance.