EUR/GBP recovers to turn positive, back above 0.7900 handle

After dropping to a weekly low level of 0.7863, the EUR/GBP cross rebounded sharply and has now turned positive to currently trade above 0.7900 handle.

On Thursday, the cross witnessed a sharp reversal from the vicinity of 0.8000 psychological level, marking over 2-month high, as the British pound soared after the killing of Jo Cox, who has been campaigning for the UK to remain within the EU.

The British Pound extended its bullish momentum on Friday as easing 'Brexit' worries boosted global risk-on sentiment. However, further downfall was restricted as the shared currency remained buoyant and the GBP/USD pair witnessed some profit-taking move after a sharp rally of over 300-pips from Thursday's lows.

Market participants now look forward to US housing market data, later during NA session, for some immediate momentum play on the EUR/GBP cross.

Technical levels to watch

From current levels, on a sustained trade above 0.7900 handle, the pair is likely to extend its bullish recovery momentum immediately towards 0.7935 horizontal resistance. However, in order to confirm extension of the near-term upward trajectory, the pair needs to build on to its strength above 0.7950 strong resistance, which if conquered decisively seems to lift the pair beyond 0.8000 handle and head towards testing its next major resistance near 0.8090-95 region, marking April daily closing highs resistance.

On the flip side, resumption of near-term weakening trend below 0.7900 handle might continue to find support around 0.7860-50 horizontal area before the pair drops further towards testing 100-day SMA important support near 0.7800 region.