EUR/GBP spikes back above mid-0.8900s after weaker UK PMI

After yesterday's modest pull-back, the EUR/GBP cross regained traction on Wednesday and spiked back above mid-0.8900s in reaction to today's UK PMI print.

The cross caught some fresh bids after the UK construction PMI fell short of consensus estimates and came-in at 11-month low level of 51.9 for July, much weaker than expected and worse than previous month's reading of 54.8. 

   •  UK construction PMI hits 11-month lows in July, a big miss on expectations

Today's weaker reading now seems to have negated previous session's upbeat manufacturing sector performance and contributed to the British Pound's underperformance against its European counterpart.

Meanwhile, the incoming solid Euro-zone macro data, including Tuesday's prelim GDP print remained supportive of the prevalent bullish sentiment surrounding the shared currency and further collaborated to the pair's up-move back closer to weekly high level of 0.8975 touched on Monday. 

Looking at the broader picture, the cross has been consolidating within a broader trading range as investors seemed reluctant to place aggressive bets ahead of the very important BOE monetary policy announcement on Thursday.

Technical levels to watch

A follow through buying interest beyond 0.8975 level could assist the cross to make a fresh attempt to conquer the key 0.90 psychological mark and head towards its next major hurdle near 0.9030 region. On the flip side, 0.8935-30 region now becomes immediate support to defend, which if broken could accelerate the fall towards the 0.8900 handle before the cross eventually drops to 0.8860-55 support.