EURGBP Seesaws Around 50-Day MA Ahead of UK Services PMI
EURGBP started the week 0.01% higher at 0.8531 as traders focus has shifted on the increasing geopolitical risks in the Middle East after an Iranian general killed in a U.S. airstrike in Baghdad.
In our forex calendar the UK December final services composite PMI will be released at 9:30GMT. Economists forecast the December Services PMI at 49 the same as the last reading. A reading below 50 will just reaffirm the sluggish conditions in the services sector.
EURGBP rebound from the December 13th low continues and attempts for a break above the 0.8536 the 50-day moving average which will provide a buying signal for the pair. GBP is under selling pressure across after the UK elections amid concerns of the relationship after the Brexit between UK and EU.
On the technical side the short term momentum is neutral, as the pair failed to break convincingly above the 50-day moving average the last trading sessions. On the upside, initial resistance for EURGBP stands at 0.8542 the daily top. If the pair brakes above that level the next resistance point is at 0.8590 the high from December 23nd. A trend reversal point is the 100-day moving average at 0.8714 which if the bulls manage to break will cancel the bearish momentum that started in October.
On the flip side, first support stands at 0.8522 the daily low. Next bid zone will be met at 0.8455 the low from December 31st. A credible break below will open the way for a move down to 0.8275 the low from December 13th.