EUR/GBP drops to session low near 0.8770 level

The EUR/GBP cross faced rejection near the 0.8800 handle and remained under some selling pressure through mid-European session on Monday.

The latest news of an agreement between Conservative's and DUP to support May's minority government was seen lending support to the British Pound and helped outperform its European counterpart.

   •  Tories and the DUP reach deal to prop up minority govt – The Guardian

Adding to this, an offered tone around the EUR/USD major, primarily led by resurgent US Dollar demand and despite of upbeat German IFO business climate index, further collaborated to pair's slide to session lows near 0.8775-70 region.

   •  Germany: IFO index at yet another record high - ING

The cross held with bearish bias for the third trading session in the previous four but has managed to hold within Friday's trading range amid persistent uncertainty surrounding the Brexit negotiations, which might continue to keep a lid on any sharp up-move for the sterling and eventually help limit any further downslide for the cross. 

   •  GBP underwent correction in the light of the difficulties faced by May - Natixis

Technical levels to watch

Immediate support is pegged near 0.8760 region, below which the fall could get extended towards 0.8735-30 horizontal support en-route the 0.8700 handle. On the upside, the 0.8800 handle remains immediate strong hurdle, which if conquered has the potential to lift the cross beyond 0.8820 intermediate support towards retesting yearly highs resistance near 0.8865 level.