EUR/GBP tests support at 0.8400

EUR/GBP dropped sharply during the European session and hit its lowest level in almost a month as the pound strengthened on the back of stronger than expected UK PMI data.

EUR/GBP lost nearly a full cent and bottomed out at 0.8400 in recent dealings. However, the pair found support at the psychological level and it was last trading at 0.8406, still down 0.99% on the day.

On the data front, UK manufacturing PMI came in well above forecasts at 53.3 in August, a marked improvement from July's 48.3 and above the 49.0 expected.

EUR/GBP levels to watch

In terms of technical levels, next supports are seen at 0.8400 (Sep 1 low/psychological level), 0.8342 (Aug 4 low) and 0.8300 (psychological level). On the other hand, resistances could be found at 0.8460 (50-day SMA), 0.8496 (Sep 1 high) and 0.8536 (10-day SMA).