EUR/GBP drops further to the 0.8550 area

• Pound’s recovery gains speed on American hours as GBP/USD rises above 1.3700.
• EUR/GBP ends positive streak, corrects lower from one-month highs.

The EUR/GBP is falling on Monday, having the worst day in a month. On European hours it climbed to 0.8593, reaching the highest level since July 22, before turning to the downside. Recently it printed a fresh daily low at 0.8549.

As of writing, EUR/GBP trades at 0.8555, holding onto a bearish bias for the day, testing the 0.8550 area; below the next support stands at 0.8535 followed by 0.8505. On the upside, 0.8575 may be seen as the immediate resistance and then 0.8595.

Pound gains on risk appetite, weaker dollar

The pound is among the top G10 currency performers on Monday, boosted by risk appetite across global markets and the rally in GBP/USD. The pair is recovering after falling sharply last week. A slide of the US dollar also weighs on EUR/GBP. The DXY drops by 0.40% as it trades at 93.10.

Economic data from the UK and the Eurozone with the preliminary August PMIs came in mostly below expectations. The UK composite PMI fell from 59.2 to 55.3, lowest in six months while in the Eurozone the index fell from 60.2 to 59.5.

Technical levels