EUR/GBP Fades a Spike to 0.7940
After hitting a fresh two-week of around 0.7940 on Wednesday, the EUR/GBP pair has given away some pips and has now returned to 0.7920 level.
Today's disappointing UK construction PMI numbers, over and above Tuesday's weak manufacturing PMI print, continue to push the pair higher. The UK construction PMI fell to 52.0 in April, down from a March's reading of 54.2, indicating deteriorating activity in UK's construction sector.
The pair is reversing after failing to sustain its strength above 50% Fibonacci retracement level of 0.8117-0.7735 down-leg. Hence, any subsequent weakness below 0.7910-0.7900 area would force the pair to erase some of its recent gains.
Technical levels to watch
Weakness below 0.7900 support is likely to get extended towards a very important 50-day SMA resistance break-point, turned support, near 0.7870-65 area. A decisive break through this support would negate possibilities of any further up-move and increase the pair's vulnerability to continue sliding lower in the near-term.
On the upside, 50% Fibonacci retracement level resistance near 0.7925 remains immediate hurdle to clear. A decisive break through this immediate resistance opens rooms for further appreciation in the near-term, towards its next major resistance near 0.7970 region, also coinciding with 61.8% Fibonacci retracement level.