FXStreet (Mumbai) – The British pound erased gains and fell sharply versus the single currency in the European morning, driving EUR/GBP close to fresh four week highs at 0.73 handle. The cross jolted higher after the pound was smashed after UK services PMI reading which showed that the services sector expanded at slowest pace since December last year.
EUR/GBP rises from 0.7255
Currently, the EUR/GBP cross rallied 0.30% at 0.7289, quickly retreating from near four week high levels at 0.7300. The cross in EUR/GBP wiped out losses and jumped nearly 50 pips after sterling dropped sharply following the release of downbeat UK services PMI data.
The UK services sector, again stayed comfortably above the contraction line for the 29th consecutive month in May as the Markit/CIPS PMI measure came in at 56.5 down from the previous month’s 59.5, and well below the estimate of 59.1.
On the other hand, the EUR/USD pair fell back in red, shrugging off improved service sector activity in the Euro area ahead of the union’s retail sales and employment data due out shortly.
However, the main highlight of the day is expected to be the ECB meeting following my Draghi’s press conference which will drive further EUR moves.
EUR/GBP Levels to consider
To the upside, the next resistance is located at 0.7300 and above which it could extend gains to at 0.7338 (April 30 High) levels. To the downside immediate support might be located at 0.7200 levels below that at 0.7177 (June 2 Low) levels.
(Market News Provided by FXstreet)