EUR/GBP drops to session lows, back below mid-0.8700s

   •  Upbeat UK retail sales data lifts GBP and prompts some fresh selling.
   •  Easing bearish pressure around EUR might help limit further downside.

The EUR/GBP cross extended its retracement slide from an intraday high level of 0.8778 and has now dropped back closer to previous session's swing lows. 

The cross met with some fresh supply during the early European session and turned lower for the third consecutive session following the release better-than-expected UK monthly retail sales data. 

In fact, the latest ONS report revealed that UK retail sales recorded a strong monthly growth of 1.6% in April, surpassing even the most optimistic estimates, and lifted the British Pound across the board.

Meanwhile, easing bearish pressure around the shared currency, primarily on the back of some USD profit-taking, might now contribute towards limiting further downside, at least for the time being. 

Moving ahead, traders now look forward to the BoE Governor Mark Carney's scheduled speech at the Society of Professional Economists' annual dinner, in London for some fresh impetus later during the NY trading session. 

Technical levels to watch

Immediate support is pegged near the 0.8720-15 region, below which the cross is likely to slide back below the 0.8700 handle towards testing its next support near the 0.8690-85 area. 

On the flip side, the 0.8780 level now seems to have emerged as an immediate hurdle, above which the cross is likely to move past the 0.8800 handle and aim towards testing the 0.8835-40 supply zone.