EUR/GBP corrects from multi-year tops as bulls take breather

The EUR/GBP cross took a breather on Monday and retreated a bit from fresh yearly tops touched on Friday.

Friday's speech by the ECB President Mario Draghi did little to dent the prevalent sentiment surrounding the shared currency and lifted the cross to its highest level since Oct. 2009. 

With investors looking past Friday's big event risk, traders seemed prompted to take some profits off the table following the pair's recent upsurge of nearly 350-pips since the beginning of this month.

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Meanwhile, today's downtick lacked any fresh fundamental catalyst and could be categorized as corrective in nature, amid near-term overbought conditions. Hence, any near-term pull-back would still be looked as a buying opportunity and might now contribute towards limiting any immediate sharp downslide for the cross. 

Investors' focus this week would remain on any fresh news/developments coming out of the next round of Brexit negotiations, which would drive sentiment around the British Pound and eventually provide some fresh impetus for the pair's well-established bullish trajectory. 

Technical levels to watch

A follow through retracement below 0.9225 level is likely to drag the cross towards 0.9190 horizontal support before the corrective slide could get extended further towards mid-0.9100s. 

On the upside, the 0.9265-70 region remains immediate strong resistance, above which the cross is likely to surpass the 0.9300 mark and dart towards reclaiming the 0.9400 handle.