EUR/GBP retreats from highs, still well-bid above 0.8600 handle

Having posted a session low at 0.8570 level, the EUR/GBP cross managed to regain some traction and extended its recovery further beyond 0.8600 handle.

Currently trading around 0.8625-30 band, the British Pound came under renewed selling pressure on Tuesday after UK Supreme Court ruled that the government has to seek parliamentary approval before triggering Article 50 to begin the process of exiting the European Union. 

The British Pound's downslide, however, remained limited on comments from UK PM May’s spokesperson that parliament has already indicated its support to the referendum and hence, the decision is unlikely to raise any possible hurdle to Brexit. 

Meanwhile, an offered tone around the EUR/USD major, failing to extract any support from Euro-zone PMI prints, also collaborated towards hindering the pair's up-move further beyond mid-0.8600s.

With the key event risk out of the way, focus now shifts to one of the most important economic indicators from UK, quarterly GDP growth numbers for the fourth-quarter of 2016, slated for release on Thursday. 

Technical levels to watch

A follow through buying interest might continue to boost the cross further towards 0.8670-75 resistance area ahead of 0.8700 round figure mark and next important resistance near 0.8725-30 region. On the downside, 0.8600 handle now becomes immediate support and is closely followed support at 0.8580 region. A convincing break below 0.8580 support is likely to accelerate the slide towards 50-day SMA support near 0.8530 region, with 0.8550 providing some intermediate support.