EUR/GBP retreats from yearly tops, comes down to test 0.91 handle

The EUR/GBP cross traded with a negative bias through the mid-European session on Monday and has now eroded majority of Friday's gains to fresh 10-month highs. 

Currently placed at session lows, just above the 0.9100 handle, today's downtick lacked any fresh fundamental driver and could be solely attributed to a modest GBP recovery. A goodish recovery around the GBP/USD major seems to have prompted some profit-taking, especially after the pair's recent upsurge of around 230-pips over the past three weeks. 

Meanwhile, a subdued action surrounding the EUR/USD major did little to provide any fresh bullish impetus, with the GBP price dynamics acting as an exclusive driver of the pair's movement at the start of a new trading week. 

Against the backdrop of the dovish ECB monetary policy meeting minutes, coupled with fading prospects of ECB tapering, might prompt some additional profit taking fall. Investors' focus, however, would remain glued to the next big event risk - Jackson Hole Symposium, where comments from the ECB President Mario Draghi should help determine the pair's next leg of directional move. 

   •  Jackson Hole Symposium: Focus will be on Draghi - ANZ

Technical levels to watch

Weakness below the 0.9100 handle is likely to accelerate the slide towards 0.9085-80 support before the cross eventually drops to its next major support near the 0.9060-50 region. On the upside, 0.9135 level is likely to act as immediate resistance, above which the cross is likely to extend its recent appreciating move towards reclaiming the 0.9200 handle en-route Oct. 2016 swing highs resistance near the 0.9260-65 region.