EUR/GBP tumbles to lows, fast approaching 0.8700 handle

The EUR/GBP cross extended its corrective slide and eroded majority of Friday's up-move to 2-1/2 month tops.

The pair's sharp fall over the past couple of hours during mid-European session could be attributed to the latest ICM UK election poll that showed Conservatives retaking 11-point lead against opponents Labour party.

With only 3-days left for the pivotal UK general election, the poll seems to have prompted some short-covering move. Traders even shrugged off today's disappointing UK services PMI, at 53.8 for May as compared to last month's 55.8. 

   •  UK May services PMI slumps, signals slowest expansion since February

Moreover, market also looked past the latest terrorist attack in London over the weekend, with political headlines continuing as a key driver of investors' sentiment surrounding the British Pound.

Meanwhile, a mildly weaker tone surrounding the EUR/USD major, primarily led by profit taking in wake of a modest US Dollar recovery, further collaborated to the pair's slide back closer to the 0.8700 handel. 

Technical levels to watch

A follow through retracement now seems to find support near the 0.8700 handle, below which the corrective slide could get extended back towards 0.8660-55 support area. On the flip side, momentum back above mid-0.8700s might continue to confront some fresh supply around 0.8770 region, which if cleared should help the cross to reclaim the 0.8800 handle.