EUR/GBP inching closer to 0.8400 handle

After bottoming out around 0.8354, the EUR/GBP cross regained its lost ground and has now moved back into positive territory to currently trade within striking distance of retest 0.8400 handle.

The shared currency continued to outperform the British Pound, with the former gaining traction despite of a weaker-than-expected Sentix Investor Confidence while the later being weighed down by disappointing construction PMI data. 

Earlier during European trading session, data released from the UK showed construction activity taking a sharp hit and contracting for the first time since April 2013. The final UK construction PMI dropped to 46.0 in June, marking its lowest levels since 2009. Meanwhile from the Euro-zone, Sentix Investor Confidence plunged to 1.7 for the current month from 9.9 recorded in the previous month and was far below consensus estimated pointing to a reading just below 9.0.

Next in focus would be BOE Financial Stability Report and BOE Governor Mark Carney's speech, preceded by UK services PMI print for the month of June, all scheduled during European trading session on Tuesday.

Technical levels to watch

With daily RSI reading above 70, already pointing to near-term overbought conditions, any further appreciating move might now be restricted at 0.8460 resistance area marked by Dec. 2013 highs. A strong follow through buying interest has the potential to continue boosting the pair, beyond 0.8500 handle, towards Oct. 2013 highs major resistance near 0.8575-80 area.

On the downside, 0.8330 level now seems to provide some immediate support, below which the pair seems to extend its slide back towards 0.8200 round figure mark. On a sustained weakness below 0.8200 handle, the pair seems to extend its near-term corrective move towards a previous strong resistance, now turned immediate strong support, around 0.8100 region.