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EUR/GBP testing lows near 0.7560 on PMI

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 3, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The EUR bears received fresh impetus from sluggish services sector activity reports from both Germany and the Euro zone, now pushing EUR/GBP further away from 0.76 handle.

    EUR/GBP drops below 5-DMA

    Currently, the EUR/GBP pair trades -0.15% lower at 0.7566, testing daily lows struck at 0.7560 earlier on the day. The EUR/GBP cross stalled its recovery and fell back in the red zone after the dismal services PMI data disappointed markets and dragged EUR/USD slightly lower near 1.09 handle.

    The German PMI services gauge dropped to 55.0 points, against 56.0 points last. While the euro zone PMI booked 53.6 in Jan, following the 54.3 seen in December.

    However, the sudden decline in the EUR/GBP cross can be mainly attributed to the rally in the GBP/USD pair backed by rebounding oil prices. Markets now await the UK services PMI report for fresh cues on the cross.

    EUR/GBP Technical Levels

    To the upside, the next resistance is located at 0.7626 (Feb 1 High), above which it could extend gains to 0.7700 (round number). To the downside immediate support might be located at at 0.7522/23 (Jan 15 & 22 Low) below that at 0.7500/0.7497 (daily S2).
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