EUR/GBP plummets below 0.8700 handle

The British Pound attracted strong buying interest after UK PM Theresa May's Brexit speech, with the EUR/GBP cross filling weekly gap higher and plummeting below 0.8700 handle.

At her much awaited speech May said Britain will not seek ‘partial’ EU membership and that the government will put final Brexit deal for a vote in both Houses of the Parliament. Additional comments that UK will not be paying huge sums to EU budget in order to gain access to the lucrative European Union's single market. 

Clarity on the process of Brexit eased some of market concerns of a 'hard Brexit' and triggered a sharp short-covering rally in the British Pound across the board, dragging the cross to a three-day low level of 0.8670. 

Technical levels to watch

Immediate support is seen near 0.8760 level below which the cross is likely to slide further towards 0.8635 level ahead of 0.8615-10 support area. On the upside, 0.8700 handle now becomes immediate resistance, which if cleared seems to lift the cross back beyond 0.8720 resistance, towards its next hurdle near 0.8755-60 region.