EUR/GBP rises for third straight day, eyeing to reclaim 0.8500 handle

The shared currency maintained its outperformance against the British Pound, with the EUR/GBP cross rising to a three-week high level, near 0.8500 neighborhood, before retracing few pips to currently trade around 0.8470 region.

Sterling came under renewed selling pressure after UK manufacturing PMI fell short of preliminary estimates and came-in at 48.2 for July, falling further into contraction territory. 

Meanwhile, the shared currency extracted some support from in-line with estimated PMI prints, assisting the EUR/GBP cross to build on to its last week gains and rise for third straight day. 

Disappointing UK data is now fueling speculations that the BOE will go ahead and announce some easing measures at its next meeting on Thursday, which might now restrict any swift recovery for the British Pound and limit any immediate sharp slide for the EUR/GBP cross.

Technical levels to watch

From current levels, 0.8500 round figure mark seems to act as immediate resistance, above which the cross seems all set to head back towards July daily closing highs resistance near 0.8580 region. On the flip side, 0.8435-30 area now seems to act as immediate support, which if broken could drag the pair back towards 0.8370 level horizontal support with 0.8400 round figure mark acting as intermediate support.