EUR/GBP aiming to retest multi-month highs

A fresh bout of selling pressure around the British Pound is assisting the EUR/GBP cross to rebound from an early dip to 0.8620 and move back closer to a multi-month high level of 0.8650 touched on Friday.

Last week, the cross recorded strong gains, advancing for third consecutive week, as cable remained under intense selling pressure on expectations of aggressive monetary easing by the Bank of England. Meanwhile, a range-bound trading action in the EUR/USD major helped the shared currency to outperform its British counterpart for sixth consecutive session on Monday.

A slew of macro releases from the UK, which includes - CPI print, employment details and retail sales data, would provide fresh impetus for GBP traders and drive the EUR/GBP cross further from its highest level since August 2013.

Technical levels to watch

A follow through buying interest above multi-month high level near 0.8650 region should pave way for continuation of the near-term upward trajectory immediately towards 0.8700 round figure mark ahead of August 2013 monthly high resistance near 0.8730 region.

On the flip side, 0.8600 round figure mark now seems to act as immediate strong support, which if broken decisively is likely to trigger a near-term corrective move that could drag the pair back towards 0.8500 psychological mark support with intermediate support near 0.8550 level.