EUR/GBP sold-off into UK PMI big beat, surrenders 0.8450

• EUR/GBP extends the slide below 0.845 amid broad GBP strength.
• UK Final Services PMI beats estimates with 53.9 in Jan.
• Upbeat risk tone further weighs down on the cross.

The resurgent demand for the pound across the board, following a big beat on the UK Final Services PMI data, seems to have weighed heavily on the EUR/GBP cross.

The cross extended declines and hit a new two-day low at 0.8434, as the GBP bulls were bolstered by an upward revision to the January UK Services sector activity report. The figure came in at 53.9 vs. 52.9 first reading and 52.9 expected. The survey showed that the services companies enjoyed the strongest influx of new orders since mid-2018.

Meanwhile, the latest report that the UK scientists made a significant breakthrough in the race for coronavirus vaccine lifted the market mood across the board and further added to the demand for the pound, as a higher-yielding currency.

Additionally, mixed economic news out of the Eurozone keeps the shared currency under pressure, collaborating with the bearish bias in EUR/GBP. The Eurozone and German Final Services PMI bettered estimates in January. However, the bloc’s Retail Sales dropped to 1.3% YoY in December vs. 2.4% expected and 2.3% last.  

Markets now eagerly await the speech by the European Central Bank (ECB) President Lagarde due at 1215 GMT for fresh trading impetus ahead of the US macro data.

EUR/GBP Technical levels to watch