EUR/GBP consolidating around 0.8600 handle ahead of UK PMI

The EUR/GBP cross was seen consolidating Thursday's sharp rebound but remained capped at 0.8600 handle ahead of UK services PMI.

Despite of yesterday's post-BOE sharp rebound from 0.8500 psychological mark, the cross failed to sustain its move beyond 0.8600 handle and ran through some offers near the 0.8625-30 resistance area. The pair, however, has managed to hold with minor gains against the backdrop of neutral BoE monetary policy stance, which disappointed markets expecting for an upgrade of central bank's inflation outlook.

Meanwhile, the pair's movement on Friday has been confined within 15-20 pips band amid range-bound price action around both the EUR/USD and the GBP/USD major, as market participants keenly await the release of US monthly jobs report for fresh near-term directional impetus, 

In the meantime, the release of UK services PMI print for January would be looked upon to grab some short-term trading opportunities during European trading session. 

Technical levels to watch

Momentum above 0.8600 handle might continue to confront resistance near 0.8625-30 region above which the cross is likely to head towards testing 100-day SMA hurdle near 0.8655 region. On the flip side, sustained weakness below 0.8580 immediate support is likely to accelerate the slide back towards 0.8550-45 intermediate support ahead of 0.8510-0.8500 strong support.