EUR/GBP spikes to 0.8580 before retracing back to 0.8550

After an initial dip to 0.8514, the EUR/GBP pair caught up with renewed buying interest, lifting the pair to session high level of 0.8580 before retracing few pips to currently trade around 0.8550 region.

The cross resumed with its bullish momentum as the British Pound came under renewed selling pressure on expectations of additional monetary easing by the Bank of England (BOE). 

BOE's MPC is scheduled to meet and announce its monetary policy decision on Thursday and as BoE Governor Mark Carney has already hinted, markets are anticipating the central bank to possibly go ahead and slash interest-rates for the first time since 2009. Market players are also speculating some sort of additional easing in August, which might further limit any sharp recovery for the British Pound. 

Meanwhile, in absence of any economic releases from the Euro-zone the shared currency might continues to outperform its UK counterpart, thus helping the EUR/GBP cross to extend its near-term upward trajectory.

Technical levels to watch

A follow through buying interest above 0.8600 handle, leading to a momentum above multi-year high level of 0.8617, would reaffirm the well-established bullish momentum that seems to boost the cross immediately towards August 2013 highs resistance near 0.8650-55 area. On the flip side, reversal back below 0.8500 handle now seems to trigger a fresh leg of corrective move immediately towards 0.8400 handle, marking 23.6% Fibonacci retracement level of its up-surge post historic Brexit referendum.