0.8600 under pressure: EUR/GBP at two-month highs following Services PMIs

Against a backdrop of weaker British Pound, the Euro (EUR) has been steadily climbing against the USD/GBP pair for the fourth day in a row, reaching near two-month high levels. This surge follows revisions to Services Purchasing Managers Index (PMI) figures from both the Eurozone and the United Kingdom, indicating a slowdown in economic activity.

Eurozone final HCOB Services PMI dropped to 51.6, while the UK S&P Global Services PMI was revised down to 52.5. Despite the downward revisions, the Euro finds support in the monetary policy divergence between the European Central Bank (ECB) and the Bank of England (BoE), with the ECB expected to raise rates by 0.25% later in the month.

The ECB's hawkish stance, as echoed by Bundesbank President Joachim Nagel, contrasts with the BoE, which is anticipated to keep rates unchanged at its September 17 meeting. The EUR/GBP pair broke a key resistance level around 0.8580-0.8585 on Wednesday, marking a potential turning point for bulls. Technical indicators, however, suggest caution, with the Relative Strength Index flirting with overbought territory.

Bulls may face resistance at 0.8600-0.8610, previously acted upon as support. The next target on the upside is the triangle pattern's measured goal, around 0.8630. Conversely, immediate support can be found near 0.8585, followed by the low from Wednesday, at 0.8565, and the triangle's bottom, near 0.8560.