EUR/GBP surges to fresh session peaks, reverses yesterday's losses post-Draghi

The EUR/GBP cross stalled previous session's corrective slide from near two-month highs and staged a goodish rebound from the 0.8600 handle.

Currently trading around 0.8640-45 region, testing session peaks, spot gained some fresh traction during early NA session and has now reversed majority of yesterday's losses after the ECB President Mario Draghi reiterated that there is no need to deviate from current monetary policy stance and that the side-effects of the unconventional policy measures remained contained. 

   •  Draghi speech: Monetary policy measures put in place in recent years have proven to be effective

With the sentiment surrounding the British Pound turning a bit negative in wake of the latest jitters from EU-UK standoff over the €100 billion Brexit divorce bill, Draghi's comments provided a fresh lift to the shared currency and further collaborated to the pair's rebound from closer to weekly lows. 

Focus now shifts to the second estimate of the UK GDP growth numbers, due for release during European session on Thursday and any disappointment should provide a fresh bullish impetus to the cross.

   •  UK GDP to stay in spotlight – Lloyds Bank

Technical levels to watch

From current levels, momentum above mid-0.8600s could get extended towards 0.8675 resistance, above which the cross seems all set to surpass the 0.8700 handle and head towards testing its next major hurdle near 0.8730-35 region.

On the downside, weakness back below 0.8625 level could drag the pair back towards the 0.8600 handle, which if broken could accelerate the slide towards 0.8575 intermediate support ahead of 0.8535-30 important support.