EUR/GBP Turns Flat at 0.7730 Post Euro-zone PMI Data
On Monday, the EUR/GBP
pair built on to its Friday’s sharp recovery and touched a session peak
level of 0.7754 during European session but has now erased all of its
gains to currently trade at 0.7730.
The pair gained traction after the flash version of German PMI printed
slight better-than-expected growth. The up-move, however, was capped on
disappointment from French manufacturing PMI release. The pair went on
to erase all of its gains after the composite Euro-zone PMI printed
slightly weaker-than-expected growth.
Given the ECB's dovish stance, any further upside is likely to be capped
and a bullish spike might be looked upon as an opportunity to initiate
fresh shorts. Moreover, the overall lead for 'Remain' camp in the 'Brexit'
poll might continue to support bid tone for the British Pound and
eventually restrict further depreciation against the shared currency.
Technical levels to watch
From current levels, the pair is likely to find immediate support near
0.7700 round figure mark, which if broken seems to drag the pair back
towards 0.7670-65 support area. A follow through weakness below
0.7670-65 support is likely to get extended even beyond last week’s low
support near 0.7650, towards testing its next major support near
0.7615-10 zone.
On the upside, April month daily closing lows support, now turned
resistance, near 0.7750 remains immediate hurdle to clear. A sustained
break through this immediate resistance has the potential to lift the
pair back towards 100-day SMA resistance near 0.7780-85 region.
