Weak EU PMI’s weigh on EURGBP

EURGBP trades 0.06% lower at 0.8823 close to 4-month lows, amid GBP strength across the board on positive Brexit developments and worse than expected European PMI’s . Germany Markit Manufacturing PMI came in at 41.4 below expectations of 44 in September. France Markit PMI Composite which came in at 51.3 below expectations of 52.7 in September, the Manufacturing PMI came in at 50.3 also below expectations of 51.2 in September while the Services PMI came in at 51.6 below forecasts of 53.2 in September. The recent interest rate cut from   ECB to -0.50% also weigh on the pair.

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On the technical analysis side, the bears are in control for the short term as the pair trading below all major moving averages. Today the pair made an attempt to regain the 200-day moving average but stopped at 0.8854. On the downside, first support stands at 0.8813 today’s low, then at 0.8784 Friday’s low, while next barrier is at 0.8723 the low from May 21st. Investors holding short positions can sit comfortably as long as the pair trades below 0.8854. The pair has just come out from oversold conditions as indicated by the daily RSI so a rebound can’t be ruled out. On the upside immediate resistance stands at 0.8854 today’s high, while a break above will open the way for a move up to 0.8952 the 100-day moving average. For those looking to buy the pair, an entry point can be when the pair breaks above the 200-day moving average 0.8835.

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EURGBP Daily Chart

Weak EU PMI’s weigh on EURGBP
Weak EU PMI’s weigh on EURGBP

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