EUR/GBP off lows but keeps red near 0.8700 mark ahead of UK jobs data

The EUR/GBP cross extended previous session's retracement from nearly two-month tops and touched multi-day lows in the past hour.

Today's price action during early European session saw a sharp recovery for the British Pound, eventually dragging the cross to the 0.8665 immediate support area. The cross, however, managed to defend the said support and quickly recovered over 30-pips from session lows.

Meanwhile, a positive tone surrounding the EUR/USD major, despite of the ongoing political uncertainty in the Euro-area, also helped limit the losses and collaborated to the pair's recovery back above the 0.8700 handle.

Despite of the latest Brexit development surrounding the Breixt issue, with the UK Parliament passing the Brexit bill without the amendments added by the House of Lords, threats of another Scottish independence referendum might continue to weigh on the British Pound.

Focus now sifts to the UK employment details, which would be looked upon for short-term trading opportunities during European trading session. Later during NY session, the highly anticipated FOMC decision is likely to trigger a fresh bout of volatility in the FX market and the spillover effect could eventually provide some fresh impetus for the cross.

Technical levels to watch

Any further recovery now seems to confront immediate resistance near 0.8720-25 area, above which the cross is likely to head back towards nearly two-month highs strong resistance near 0.8785 level before aiming towards the 0.8800 handle.

On the downside, 0.8665-60 area remains immediate support to defend, which if broken is likely to turn the cross vulnerable to head back towards the 100-day SMA support near 0.8600-0.8595 region, with some intermediate support near 0.8625 level.

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