EUR/GBP holds above 0.8800 handle, Draghi speech eyed

The EUR/GBP cross reversed an early dip below the 0.8800 handle and touched a fresh session high near 0.8835 level in the past hour, albeit retreated thereafter. 

The cross has now recovered part of previous session's sell-off, led by stellar UK monthly retail sales report and post-FOMC slide in the EUR/USD major. A modest pickup in the shared currency seems to be only factor behind the pair's tepid recovery move through early European session.

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The cross, however, remains within striking distance of two-month lows touched in the aftermath of last week's hawkish BoE decision. Hence, growing market expectations for an eventual BoE rate hike action in November might continue to keep a lid on any immediate sharp recovery for the cross.

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Meanwhile, today's release of UK August public sector borrowing data passed largely unnoticed, with a mildly positive tone surrounding the common currency acting as an exclusive driver of the pair's uptick on Wednesday. 

Later during the NA session, the ECB President Mario Draghi's speech at the European Systemic Risk Board annual conference would now be looked upon for some fresh impetus and to grab some short-term trading opportunities. 

Technical levels to watch

Any immediate recovery is likely to confront immediate resistance near mid-0.8800s, above which the cross is likely to make a fresh attempt towards reclaiming the 0.8900 handle.

On the downside, weakness below the 0.8800 handle might continue to find immediate support near the 0.8780-75 region, which if broken is likely to accelerate the slide towards 0.8740-35 support area.