EUR/GBP breaks below 0.91 handle to hit 3-1/2 week lows

The British Pound outperformed its European counterpart on Monday, pushing the EUR/GBP cross below the 0.9100 handle to a three-and-a-half-week low.

The cross extended its near-term corrective slide and has now retreated over 200-pips from yearly tops near the 0.9300 handle touched on August 29. The latest leg of sharp slide over the past hour or so could be attributed to comments by the UK PM spokesman that government is confident of passing EU withdrawal bill at vote in Parliament. 

This coupled with speculations that the Bank of England (BOE), when it announce the latest monetary policy decision on Thursday, might sound more hawkish on interest rates further drove the British Pound higher across the board and collaborated to the weaker tone surrounding the cross. 

Meanwhile, the range bound action around the EUR/USD major, despite of comments from various ECB governing council members, did little to provide any fresh impetus, with the GBP price dynamics acting as an exclusive driver of the pair's slide below the 0.9100 handle. 

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Technical levels to watch

Immediate support is now pegged near 0.9070 level, below which the corrective slide could get extended towards 0.9045-40 intermediate support en-route the key 0.90 psychological mark.

On the upside, any recovery attempts might continue to confront fresh supply near the 0.9115-20 region, which if cleared might trigger a short-covering rally towards 0.9175 horizontal hurdle with some intermediate resistance near 0.9140 area.