The EUR to GBP (EURGBP) pair is little changed today as investors react to the upbeat manufacturing and services PMI data from Europe. The numbers show that the European economy is recovering after days of being in lockdown.
Eurozone PMI numbers jump
Manufacturing and services activities in the eurozone jumped sharply in June as more companies started to reopen. This is according to Markit, which released the PMI numbers today. The data showed that the manufacturing PMI in the eurozone jumped to 46.9 from the previous 39.4. This is evidence that more firms are now operating.
Analysts polled by Bloomberg were expecting the PMI to show a slight improvement of 44.5. Meanwhile, the services PMI, which is an important part of the eurozone economy jumped to 47.3 from the previous 30.5.
Busines activity improved throughout Europe. For example, in France, the manufacturing PMI returned to growth after rising to 51.3 in June. A PMI reading of 50 and above is usually a sign that the sector is growing. Meanwhile, in Germany, the PMI rose to 44.6.
UK PMIs improve
The EUR to GBP struggled for direction as investors also reflected on the better-than-expected manufacturing and services PMI numbers. The data showed that the manufacturing PMI jumped to 50.1 from the previous 40.7. The important services PMI rose to 47.0 from the previous 29.
These numbers came on the same day that Boris Johnson is expected to update the country on the next phase of reopening. According to media reports, the prime minister is expected to announce the reopening of bars and museums. This announcement came at a time when the number of coronavirus cases in the UK is rising. According to Worldometer, the country has been confirming more than 1,000 new cases every day.
The EUR to GBP pair is trading at 0.9042, which is along the 61.8% Fibonacci retracement level, which is an important resistance level. The price is also above the 50-day and 100-day exponential moving averages. Additionally, the EURGBP pair is moving upwards in an ascending channel. As such, a move above the 61.8% Fib level will see the price continue rising as bulls attempt to test the next resistance at 0.9200.
On the flip side, a move below the support at 0.8863 will invalidate this trend. This price is slightly below the 50% retracement and is along the lowest level on June 9.