EUR/GBP Climbs Further Towards 0.7950 on UK PMI
A renewed bout of selling pressure hit the GBP after the UK construction PMI came in worse-than expected in April, driving EUR/GBP further into the positive territory towards 0.7950 levels.
EUR/GBP benefits from GBP weakness
Currently, the EUR/GBP pair trades 0.29% higher at fresh 2-week highs of 0.7936, extending beyond 0.79 handle. The cross keeps its bullish momentum intact and now looks to test the mid-point of 0.79 handle, mainly driven by fresh supply in the cable after the construction sector activity deteriorated at the start of the second quarter. The construction sector in the UK worsened in April, down to 52.0 from a previous reading of 54.2.
On the other hand, the EUR/USD pair appears to have ignored dismal services PMI results and now re-takes 1.15 handle, further boosting the upside in the cross. Germany’s services PMI weakened to 54.5 points from 55.1 in March, slightly missing the expected 54.6 points. While the euro zone's April services reading reached 53.1, unchanged from March.
With the PMIs out of the way, focus now turns towards the US jobs data for further momentum on both the EUR and GBP.
EUR/GBP Technical Levels
To the upside, the next resistance is located at 0.7948/50 (Mar 31 High/ psychological levels), above which it could extend gains to 0.8000 (round number). To the downside immediate support might be located at 0.7890/75 (daily pivot/ 5-DMA) below that at 0.7823/12 (10-DMA/ 1h 200-SMA).