FxWirePro: EUR/GBP extends weakness after rejection at 55-EMA, upbeat UK Services PMI buoys pound

EUR/GBP chart - Trading View 

EUR/GBP was trading 0.20% lower on the day at 0.8596 at around 09:55 GMT, upbeat UK Services PMI boosts the British pound, dragging the pair lower.

The pair was extending weakness for the 2nd straight session after recovery attempts were rejected at 55-EMA.

According to data published by IHS Markit, final UK Services PMI was revised higher to 62.9 for May from 61.8 flash estimate, which pointed to the fastest rate of output growth in 24 years.

Upbeat data showed recovery in the UK services sector gained further momentum in May, validated the optimistic outlook for the UK economy.

BoE policymaker Gertjan Vlieghe indicated last week that the central bank was likely to raise rates earlier if the economy rebounds more quickly than expected. 

Upbeat data further acted as a tailwind for the sterling and weighed on the pair, dragging it lower.

Technical bias for the pair is bearish. Rejection at 55-EMA has reinforced downside in the pair. Scope for downside resumption.

Next major bear target lies at 110-month EMA at 0.8473. Breach below 110-month EMA will see further weakness.