EUR/GBP moves within striking distance of 0.8700 handle after German IFO

The EUR/GBP cross maintained its bid and jumped to a fresh monthly highs on the back of upbeat German IFO business climate index for the month of September. 

Currently trading around 0.8690-85 band, the cross built on to Friday's strong momentum after German IFO business climate for September came-in at 109.5, which was better-than 106.3 expected and 106.2 recorded in August. 

Meanwhile, the offered tone around the British Pound on concerns of a "hard" Brexit also contributed to the ongoing bullish momentum in the EUR/GBP cross. 

Later on Monday, ECB President Mario Draghi's testimony before the Committee on Economic and Monetary Affairs of European Parliament would be in focus that would provide fresh impetus for the cross. 

Technical levels to watch

A follow through buying interest above 0.8700 immediate resistance, the cross seem all set to retest August swing high resistance near 0.8725 above which a fresh leg of up-move should lift the pair to July 2013 highs resistance near 0.8770 region. 

Meanwhile on the downside, 0.8655-50 region now becomes immediate support to defend, which if broken is likely to drag the pair back towards 0.8600 handle. Any further weakness below 0.8600 handle is likely to be short-lived and should get bought into near 0.8580 horizontal support.