EUR/GBP jumps to session high after disappointing UK PMI

The EUR/GBP cross reversed from an early dip to 0.8300 region and jumped to session high near 0.8370 region following the release of UK PMI numbers.

The first release of the flash version of UK manufacturing and services PMI for July showed a dramatic deteriorating in the economic activity in the UK after last month's historic Brexit referendum. Although the manufacturing PMI showed a better-than-expected reading of 49.1, it remained in contraction territory and dropped to the lowest level since March 2013. Meanwhile, manufacturing PMI slumped at the fastest pace since early-2009.

Adding to this, stronger-than-expected PMI reading from the Euro-zone provided addition boost and might continue attracting buying interest around the EUR/GBP cross.

Technical levels to watch

Sustained weakness below 0.8300 seems to drag the pair back towards 0.8250 region (two-week low) before heading towards 0.8188 (June 27 low), which if broken seems to trigger a fresh leg of corrective move for the pair.

On the flip side, bullish momentum above 0.8400 handle, and a subsequent move above 0.8424-27 resistance (July 19-20 highs) would confirm resumption of the pair's near-term upward trajectory and is likely to lift the pair immediately towards 0.8249 (July 14 high) before eventually heading back above 0.8500 psychological mark.