EUR/GBP flirting with lows near 0.8525 ahead of UK retail sales

The EUR/GBP cross snapped three consecutive days of winning streak and retreated from an important resistance near the 0.8550 region.

Currently trading around 0.8520-25 region, the cross reversed part of previous session's strong gains to multi-day tops as traders seemed inclined to take some profits off the table ahead of monthly retail sales figures from the UK. Investors on Friday would take cues from the release of UK monthly retail sales data, which is expected to post 0.9% m-o-m growth. 

Meanwhile, an offered tone around the EUR/USD major, amid tepid greenback recovery, further collaborated to the pair's corrective slide on Friday. 

Looking at the technical picture, the cross is reversing from 23.6% Fibonacci retracement level of its recent downslide from Jan. highs to multi-week lows touched at the beginnig of this week. It, however, would be prudent to wait for a decisive break below 0.8500 psychological mark before confirming a reversal.

Technical levels to watch

From current levels, 0.8505-0.8500 region seems to protect immediate downside, which if broken decisively is likely to accelerate the slide back towards 0.8455-50 important support before the cross eventually aims towards testing 0.8400 strong horizontal support.

On the flip side, 0.8550-55 region remains immediate hurdle above which the cross is likely to extend its near-term recovery trend initially towards 0.8585 intermediate resistance ahead of 0.8600 round figure mark.