EUR/GBP extends gains above 0.9000 as pound remains under pressure

• Pound under pressure on Brexit concerns and UK data.
• EUR/GBP having the best performance in months, remains in an ascendant channel.

The EUR/GBP pair rose sharply on Monday erasing most of last week losses. It surged on the back on the back of a decline of the pound across the board, affected by Brexit jitters and UK economic data.

Comments from EU Chief Negotiator Michel Barnier over the weekend created more uncertainty about UK PM May proposals for the future relationship. Then, disappointing UK manufacturing data sent the pound lower. The Markit PMI fell to 52.8 in August, a 25-month low. The Eurozone PMI came in line with expectations at 54.6.

EUR/GBP peaked at 0.9033, the highest level since last Wednesday. It is trading in a range between 0.9010 and 0.9030, consolidating important daily gains. From Friday’s close, the euro is up 70 pips, having the best performance in months.

Technical levels to watch

To the upside, the immediate resistance is seen at 0.9035 (Sep 3 high) followed by 0.9070 and 0.9095/0.9100 (las week highs). On the flip side, support could be located at 0.8995, 0.8970 and then 0.8930 (lower limit of the bullish channel).