EUR/GBP reverses majority of previous session gains ahead of UK PMI

The EUR/GBP cross snapped three consecutive days of winning streak and has now reversed majority of previous session gains to six day peaks. 

Currently trading around 0.8520-15 region, a fresh wave of selling pressure around the EUR/USD major in wake of by reviving bets for an eventual Fed rate-hike action at the next FOMC meeting on March 14-15 coupled with the ongoing political uncertainty in the Euro-zone, has been a key factor for the shared currency's underperformance against its British counterpart. 

The downslide, however, has been limited and the cross has held above the 0.8500 psychological mark amid some bearish sentiment surrounding the GBP/USD major as well, led by renewed fears of another Scottish referendum and impending Brexit concerns. 

Today's UK economic docket features the release of manufacturing PMI, which is expected to tick lower from January's 55.9 to 55.5 in February and might provide some opportunities for short-term traders during European session.

Technical levels to watch

A follow through retracement below 0.8500 psychological mark could get extended towards 0.8480-75 horizontal support, below which the cross seems vulnerable to head back towards 0.8425 strong horizontal support. On the flip side, momentum above 0.8540 immediate resistance now seems to lift the cross beyond 0.8590 (Feb. 17 high), and 0.8600 handle, towards testing 100-day SMA hurdle near 0.8625 region.