EUR/GBP jumps to session tops post-UK PMI

The EUR/GBP cross reversed an early dip to the 0.8800 handle and has now jumped to fresh session tops following the release of UK PMI. 

The British Pound weakened across the board after the latest UK manufacturing PMI missed expectations and dropped to 55.9 for September, down from previous month's reading of 56.9 and worse than 56.3 expected. 

   •  UK’s Hammond: Underlying UK economy is very strong

Despite of the sharp uptick of around 20-25 pips, the cross held below Friday's swing highs as the shared currency continues to be weighed down by the possible implications of the disputed referendum on Catalonia independence in Spain.

   •  90% Of Catalans voted "Yes" To leave Spain – RTRS

Hence, it would be prudent to wait for a strong follow through traction before confirming that the cross might have bottomed out in the near-term.

Technical levels to watch

Immediate strong resistance remains near 0.8840 level, which if cleared decisively is likely to accelerate the up-move towards 0.8875 intermediate resistance en-route the 0.8900 handle.

On the flip side, weakness below 0.8790 level could get extended back towards 0.8760-50 horizontal support, below which the cross could head towards testing the very important 200-day SMA support near the 0.8725 region.