EUR/GBP muted around 0.8575 after UK PMI

The EUR/GBP cross had a muted reaction to the release of UK manufacturing PMI and was confined in a narrow trading range below 0.8600 handle.

Spot remained stuck near 0.8575-80 band after UK manufacturing PMI print came-in at 55.9, down slightly from December’s 56.1, but matched consensus estimates forecasting 55.9. A reading above 50 indicates expansion, while a reading below signals contraction. 

The data provide little impetus as did the final print of Euro-zone PMI readings, which rose to 69-month high at the start of 2017 but went unnoticed, as market participants seem to await for BoE’s super Thursday before determining the pair’s near-term trajectory.

Technical levels to watch

On the upside, momentum back above 0.8600 round figure mark is likely to lift the cross back towards 0.8640-45 resistance area (yesterday's high) above which the pair is likely to clear 100-day SMA hurdle and head towards testing its next resistance near 0.8675-80 horizontal zone.

Meanwhile, weakness below 0.8570-65 area seems to drag the cross back towards 50-day SMA support near 0.8525 region ahead of 0.8500 psychological mark.