EUR/GBP fails to clear 0.8500 handle, dips to 0.8475 amid cautious trade

After yesterday's sharp rebound from weekly low level to a fresh 3-week high near 0.8500 region, the EUR/GBP cross dipped lower on the last trading day of the week and is currently trading around 0.8475 level.

The cross on Thursday benefitted from an intense selling pressure surrounding the British Pound after BOE surprised by expanding its Asset Purchase Facility over and above slashing its benchmark interest rates to a new record low level. 

Sterling's tepid recovery on Friday restricted further up-move for the cross. Moreover, an unexpected contraction in German factory order also contributed to some profit taking move in the EUR/GBP cross. 

Meanwhile, a broadly cautious sentiment ahead of the NFP release, later during NA trading session, is likely to limit volatility in the FX market and limit any sharp moves for the EUR/GBP cross.

Technical levels to watch

From current levels, 0.8500 handle remains immediate resistance to watch for, above which the cross is likely to extend its bullish traction immediately towards post-Brexit daily closing highs resistance near 0.8580 region. 

On the flip side, sustained weakness below 0.8465-60 horizontal level and a subsequent drop below 0.8435 support now seems to negate expectations of further bullish momentum and drag the pair back below 0.8400 handle, towards testing its next major support near 0.8360-50 region.