EUR/GBP retraces to 0.8465 after soaring to multi-year high

Extending its strong bullish momentum, the EUR/GBP cross surged to 0.8500 neighborhood before retracing few pips to currently trade around 0.8460-70 band. 

A fresh bout of selling pressure around the British Pound after the release of lower-than-expected UK services PMI print for the month of June. According to the data release earlier, the UK services PMI fell short of consensus estimates and dropped to 52.3 points in June, down from 53.5 points in May. The incoming data points are already hinting towards Brexit-led economic fallout for the UK economy. 

Moreover, BOE Governor Mark Carney's comments on uncertain economic outlook further fuel the bearish sentiment surrounding the British Pound. 

Meanwhile, the Euro-zone final services PMI figures were mostly in-line with the initial estimates and have been supportive for the shared currency's outperformance against its UK counterpart. 

Going forward, traders will continue to keep a close watch on any further developments / news surrounding the historic Brexit referendum, with one eye on other UK economic data slated for release during the course of the week. 

Technical levels to watch

With near-term overbought conditions, as depicted by daily RSI reading above 70, the pair seems more likely to consolidate at current levels or witness a near-term corrective move. Signs of profit-taking seem to drag the pair immediately towards 0.8400 handle, below which the near-term corrective move seems to get extended initially towards 0.8300-0.8280 intermediate support and eventually towards 0.8200 strong support. Meanwhile, a strong bullish momentum above 0.8500 psychological mark has the potential to continue boosting the pair in the near-term, possibly towards Oct. 2013 highs resistance near 0.8580 region.