The EUR/GBP pair staged an impressive rally last week and gained more than 150 pips. However, the pair struggled to preserve its bullish momentum on Monday and was last seen losing 0.25% on a daily basis at 0.8650. In the absence of significant fundamental drivers, however, EUR/GBP's drop in the early European session looks more like a technical correction rather than a reversal. Reflecting this sentiment, the latest CFTC data revealed that speculators' net-long GBP positions fell to the lowest level in nine weeks.
Earlier in the day, the data published by Eurostat showed that Retail Sales in the euro area expanded by 3% in February. Although this reading beat analysts' estimate for an increase of 1.5% it was largely ignored by market participants. Analysts further noted that the initial support is located at 0.8646 ahead of 0.8578. Below the latter, additional losses could be seen toward the 0.8526/21 area, where buyers are likely to show interest again.