EUR/GBP struggling to move back above 0.8400 handle

After an initial attempted recovery to 0.8433, the EUR/GBP cross erased all of its gains and extended Tuesday's reversal to currently trade just few pips away from a 4-day low level, below 0.8400 handle.

The British Pound maintained its outperformance against the European counterpart for second day running even as the final services PMI print reflected a sharp slow-down in the UK services sector. 

Immediately after the release the pair dropped to session low of 0.8378, but further selling pressure was limited ahead of Thursday's key BOE monetary policy decision. The central bank is widely expected to cut its benchmark rates by 25 bps, while there could also be talks of some additional quantitative easing. 

Along with the announcement, BOE will also release its quarterly inflation report that would provide central bank's projection for inflation and economic growth over the next 2 years and eventually drive its monetary policy in the near-future.

Technical levels to watch

On the immediate downside, sustained weakness below 0.8365-60 support might negate possibilities of any further up-move and drag the pair immediately towards July swing lows support near 0.8250 with 0.8300 round figure mark acting as intermediate support. 

On the upside, immediate strong resistance now lies at 0.8430-35 area (session high) ahead of 0.8470 (recent daily closing high), which if conquered clears the way beyond 0.8500 handle towards retesting post-Breixt swing highs.