EUR/GBP Eying 50-Day SMA to Extend Support
The EUR/GBP pair extended its slide during pre-opening session in the US, hitting fresh sessions low of 0.7878.
UK services PMI released during mid-Europeans session continued to point deteriorating conditions across various sectors of the British economy. The Markit/CIPS UK services PMI decelerated further to 52.0 in April, down from 53.7 measured in March, and below estimate of 53.5.
Despite of this week's softer PMI prints from UK, the British Pound seems to have found some buying interest at lower levels. The relative out-performance of the British Pound, coupled with extension of the weakening trend in the shared currency (Euro) continued exerting pressure on the pair.
Technical levels to watch
From current levels the pair seems to extend its retracement back towards the 50-day SMA resistance break-point, now turned immediate strong support, near 0.7865 area. Failure to hold this resistance turned support level could continue dragging the pair lower in the near-term. Below 50-day SMA, the pair seems to drop back below 0.7800 level, to test its next major support near 0.7780 area.
Meanwhile on the upside, 0.7900 handle now turns out to be immediate resistance. Any up-move beyond 0.7900 level might now attract fresh offers till 0.7925 resistance level. Only a sustained break-through 0.7925 resistance might now negate any bearish bias, thus opening room for an immediate up-move towards 0.7970 resistance area.