The pound firmed against its major counterparts in the European session on Tuesday, as European shares rose after U.S. President said that the U.S.-Chine phase one trade deal was "fully intact" and the latest batch of business activity data suggested early signs of economic recovery from the coronavirus crisis.

Following a record downturn, Germany's private sector showed signs of a turnaround in June, flash data from IHS Markit showed.

The flash composite output index climbed to 45.8 in June from 32.3 in the previous month. This was the highest reading in four months and above economists' forecast of 44.2.

The survey highlighted the effects of easing lockdown restrictions and also an improvement in business confidence.

The manufacturing Purchasing Managers' Index advanced to 44.6 from 36.6 a month ago, while the services PMI came in at 45.8 versus 32.6 in the previous month and well above forecast of 42.0.

The pound climbed to a 5-day high of 1.2513 against the greenback, after falling to 1.2436 at 9:15 pm ET. The pound is poised to find resistance around the 1.27 level.

The pound appreciated to a 5-day high of 133.99 against the yen, from a low of 132.74 hit at 9:15 pm ET. The pound is seen finding resistance around the 135.00 mark.

The pound recovered to 0.9024 against the euro, from an early low of 0.9052. This may be compared to a 4-day high of 0.9019 set in the Asian session. If the pound rises further, it may find resistance around the 0.88 level.

In contrast, the pound fell to 1.1777 against the franc, from an early 5-day high of 1.1842. Should the pound drops further, 1.15 is likely seen as its next support level.

Looking ahead, the U.S. new home sales for May are due in the New York session.

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