EUR/GBP sticks to modest recovery gains post-UK PMI

   •  UK manufacturing PMI jumps to 51-month high. 
   •  GBP bulls seemed unimpressed after Brexit optimism-led strong upsurge.
   •  Short-covering, from 200-DMA important support, dominates.

The EUR/GBP cross had a rather volatile reaction to the UK data but has managed to hold on to its modest recovery gains.

The cross quickly retreated around 20-pips from session tops after the Markit UK manufacturing PMI surpassed expectations by a wide margin and jumped to a 51-month high level of 58.2 in November. 

The upbeat reading, however, failed to provide any follow-through bullish impetus to the British Pound, which has been gaining strong traction over the past few days on the back of optimism surrounding Brexit talks. 

Meanwhile, the cross maintained its positive tone amid a modest pickup in demand for the EUR/USD major, backed by upbeat EZ PMI prints, and some signs of short-covering from the very important 200-day SMA support.

Technical levels to watch

A follow-through recovery move is likely to get extended towards 0.8860-65 horizontal resistance, above which the cross is likely to dart towards reclaiming the 0.8900 handle.

On the flip side, the 0.8800 handle now seems to protect the immediate downside, which if broken could infuse additional weakness towards 0.8760 en-route Nov. monthly lows support near the 0.8735-30 region.