EUR/GBP hits fresh multi-year highs

The British Pound remained under intense selling pressure across the board, lifting the EUR/GBP cross surging to a fresh multi-year high level.

Currently trading around 0.8755 band, the cross recovered from an early dip close to 0.8700 handle and resumed with its near-term bullish momentum, shrugging-off the better-than-expected release of UK construction PMI. UK construction sector returned to growth in September and the Markit/CIPS UK construction PMI rose to 52.3 from 49.2 recorded in August. 

Concerns of a 'hard Brexit', following UK Prime Minister Theresa May's comments over the weekend, have been the key factor weighing heavily on the British Pound. 

Meanwhile, an offered tone around the EUR/USD major might have restricted further upside, allowing markets to digest the pair's strong break-out momentum through 0.8700 handle.

Technical levels to watch

Immediate upside resistance is pegged at July monthly highs near 0.8770 region above which the cross is likely to aim towards reclaiming 0.8800 handle. On the downside, any corrective move now seems to find immediate support near 0.8725 and weakness below this immediate support is likely to be short-lived and might be bought into near 0.8700 handle.