EUR/GBP Surges to Two-Month Highs on Revised PMIs and Monetary Policy Divergence

The EUR/GBP exchange rate has reached two-month highs after the Services PMIs for August were revised lower. The Eurozone's final HCOB Services Purchasing Managers Index (PMI) was revised down to 51.6 from 51.7, while the UK S&P Global Services PMI was revised to 52.5 from 52.8.

The monetary policy divergence between the European Central Bank (ECB) and the Bank of England (BoE) is also contributing to the Euro's strength. The ECB is expected to raise interest rates by a quarter point later this month, while the BoE is seen as likely to keep rates unchanged at its September 17 meeting.

The EUR/GBP pair has broken above a triangle pattern and is now targeting a previous support area around 0.8600. However, bulls may struggle at this level due to overbought momentum indicators on the 4-hour chart.