EUR/GBP Falls After 4-Day Rally

EUR/GBP Falls After 4-Day Rally

5 May 2016, 20:24
Roberto Jacobs

EUR/GBP Falls After 4-Day Rally

EUR/GBP is losing 50 pips on Thursday despite another weak economic report from the United Kingdom. During the American session, the pair printed a fresh daily low at 0.7860, the lowest since Tuesday.

The pair started the day above 0.7900, holding a bullish tone after hitting on Wednesday 0.7947 (2-week high). Yesterday it finished far from the highs and today it retreated even further. For the first time in a week, the euro is down versus the pound after rising almost 200 pips.

In the UK, the PMI service index dropped to 52.3, below the 53.5 expected. It was the lowest reading in three years. Earlier in the week, the construction and manufacturing PMI also showed the lowest numbers in years.

EUR/GBP technical levels

Today’s decline found support around the 55-DMA that stands at 0.7860 and is the first technical resistance to consider followed by 0.7820 (May 2 low) and 0.7800/05 (psychological / April 28 high). On the opposite direction, resistance could be seen at 0.7890 (May 4 low), 0.7920 (May 3 high) and 0.7945/50 (Mar 24 / May 4 high).


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