EUR/GBP hits fresh 16-month highs on UK PMI

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The EUR/GBP cross caught a fresh bid tone following the release of worse-than expected UK manufacturing PMI report, which weighed on the British pound.

    EUR/GBP eyes 0.8000

    Currently, the EUR/GBP pair trades 0.33% higher at fresh 16-month highs of 0.7952, having found solid support near 0.7920 region. The cross in the EUR/GBP jolted higher last minutes after the pound stalled its recovery against the greenback and fell back closer towards daily lows on below estimates UK data.

    The UK manufacturing PMI for March rose 50.8 to 51.0, but missed estimate of a 51.2 print Markit revealed on Friday.

    On the other hand, the rally in the EUR/UD pair remains capped just shy of 1.14 barrier as markets digest mixed manufacturing PMI report from Euro zone and Germany. The German PMI barely rose to 50.7 from 50.5 booked in February. The euro zone's manufacturing PMI rose to 51.6 from 51.2 previously.

    Moving on, markets now expect the US jobs report to provide fresh direction on the EUR and GBP, which will have major impact on the cross.

    EUR/GBP Technical Levels

    To the upside, the next resistance is located at 0.8000 (round number/ Dec 2014 levels), above which it could extend gains to 0.8042 (Nov 2014 high). To the downside immediate support might be located at 0.7950 (daily R1) below that at 0.7900/0.7896 (1h 50-SMA/ 10-DMA).
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