EUR/GBP slides farther below 0.89 handle on Catalan uncertainty

The EUR/GBP cross last week's sharp reversal slide, from near one-month tops, and remained under some selling pressure for the third consecutive session. 

The cross faded an initial uptick to the 0.8900 handle and dropped to 1-1/2 week lows during early European session on Monday. Catalonian political uncertainty was seen denting sentiment around the shared currency and has been one of the key factors weighing on the cross. 

In absence of any major market moving economic releases, the incoming political headlines would remain on the driver seat. 

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Meanwhile, the British Pound's relative outperformance, against its European counterpart, could also be attributed to last week's news report that the EU may offer a two-year Brexit transition deal to the UK. 

Investors will also take cues from news coming out of the UK PM Theresa May and Brexit Secretary David Davis' surprise meeting with the EU commission chief, Jean-Claude Juncker, and the EU’s top Brexit negotiator, Michel Barnier.

   •  UK's Foreign Sec Johnson: time to get conversation going and begin serious negotiations

Technical levels to watch

Immediate support is pegged near 0.8835 level, below which the cross is likely to drift back towards the 0.8800 handle en-route 0.8765-60 support area.

On the flip side, 0.8900 handle now seems to have emerged as immediate resistance, which if cleared could lift the cross back towards 0.8975 supply zone with some intermediate hurdle near 0.8930 area.