EUR/GBP surges to 0.8560, inching closer to post-Brexit highs

The British Pound remained under intense selling pressure, with the EUR/GBP cross building on to its strength above 0.8500 handle to currently trade at a nearly 1-month high level around mid-0.8500s.

Increasing prospects of further monetary easing by BOE after MPC member Ian McCafferty's dovish comment seems to be weighing on sterling. 

Adding to this, deterioration in UK manufacturing activity and bulging goods trade balance attracted further selling pressure surrounding the British Pound.

Currently trading at session high level of 0.8560, the cross seems all set to extend its bullish momentum towards post-Brexit daily closing high resistance near 0.8580 region, above which a fresh leg of up-move would continue to assist the cross to scale new highs in the near-term.

Technical levels to watch

On a sustained move above 0.8580 resistance, the cross is likely to aim immediately towards 0.8617 (July 6 high) before extending its upward trajectory towards August 2013 swing high resistance near 0.8650 region.

Meanwhile on the downside, 0.8500 psychological mark now seems to act as immediate support. Failure to hold this immediate support, and a subsequent drop below weekly lows support near 0.8465-60 region, would trigger a near-term corrective move, which might drag the cross back towards testing 0.8400 round figure mark support (20-day SMA region).