EUR/GBP turns lower to 0.8455 after UK PMI

After climbing to a fresh 3-weekly high level near 0.8500 neighborhood, the EUR/GBP cross stalled its three day winning streak and drifted into negative territory to currently trade around 0.8460 region. 

Better-than-expected UK construction PMI provided the much respite for the British Pound against its European counterpart. According to the Markit's PMI reading, construction activity in UK contracted during the month of July. However, the drop was shallower that what consensus estimates were pointing to. The final PMI print came-in at 45.9 as compared to 43.8 expected.

Markets, however, remained cautious ahead of this week's key event risk, BOE monetary policy decision. The central bank is expected to cut interest rate for the first time in 7-years, which seems to restrict any swift recovery for the British Pound and thus might limit immediate sharp slide in the EUR/GBP cross.

Technical levels to watch

Although weakness below 0.8450 immediate support could get extended, but seems unlikely to drag the pair below 0.8420 strong support. However, a follow through selling pressure below 0.8420 might turn the pair vulnerable to continue drifting lower towards testing its next major support near 0.8365 region.

On the flip side, 0.8500 handle remains immediate strong barrier, which if conquered seems to set the stage for resumption of the pair's near-term upward trajectory and boost it immediately towards recent closing highs resistance near 0.8580 level.