EUR/GBP refreshes session top after UK PMI

The EUR/GBP cross extended its tepid recovery move further beyond the 0.8500 mark and jumped to fresh session tops after UK manufacturing PMI.

Currently trading around 0.8530 region, the cross caught fresh bids after the UK data showed manufacturing activity slowed for the third consecutive month in March. In fact, the Markit UK manufacturing PMI dropped to a four month low level of 54.2 for March, down from 54.6 recorded in February and worse than 55.1 expected.

The disappointing manufacturing data attracted some fresh selling pressure around the British Pound and provided an additional boost to the EUR/GBP pair’s tepid recovery move. 

Meanwhile, a tepid recovery bounce in the EUR/USD major, against the backdrop of recent ECB headlines pointing to continuation of the central bank’s highly accommodative monetary policy, further helped the cross to hold on to its recovery gains. Moreover, markets seem to have largely ignored the final print of Euro-zone PMI prints, which were broadly in-line with the preliminary estimates. 

Technical levels to watch

Any further recovery is likely to confront resistance near 0.8545-50 area, above which a bout of short-covering could lift the cross back towards the very important 200-day SMA resistance near 0.8585 region.

Meanwhile, retracement back below multi-week lows support near 0.8490 region is likely to turn the cross vulnerable to extend its recent downward trajectory further towards 0.8430 horizontal support ahead of the 0.8400 handle.