EUR/GBP surge past 0.8400 level ahead of UK Services PMI

A fresh bout of selling pressure around the British Pound boosted the EUR/GBP cross to a fresh 2016 high, lifting it beyond 0.8400 handle to currently trade at its highest level since Dec. 2013.

On Monday, the cross initially dropped to 0.8350 but managed to erase all of its earlier losses after the release of a highly disappointing UK construction PMI print for the month of June. Data released on Monday showed construction activity in UK taking a sharp hit and contracted for the first time since April 2013 with the final UK construction PMI dropping to 46.0 in June, marking its lowest levels since 2009. 

PMI data will remain in focus on Tuesday and traders seem to have turned cautious over Brexit-led economic fallout in UK with the scheduled release of UK services PMI for June. Consensus forecast expect PMI to ease a bit to 53.1 from 53.5 recorded in May. On Tuesday, market participants will also confront the release of services PMI figures and monthly retail sales data from the Euro-zone. 

Technical levels to watch

From current levels, the cross seems to extend its upward trajectory towards Dec. 2013 highs resistance near 0.8460 level. With daily RSI already pointing towards near-term overbought conditions, the pair seems more likely to consolidate at higher levels before extending its appreciating move in the near-term.

Meanwhile on the downside, weakness back below 0.8400 handle might continue to find immediate support near yesterday's low near 0.8350 area, below which the pair seems to extend its near-term corrective move, initially towards 0.8300 round figure mark before heading back to 0.8200 round figure mark important support.