- Positive chatter around the ECB and the probability of a shift to a more aggressive tone in the next months is supporting the single currency.
- EUR/GBP is extending gains for 3rd consecutive session. Price action above 200-DMA (0.8596) and daily cloud, bias higher.
- Technicals studies on weekly charts also support upside.
- Scope for further upside on break above 0.8761 (50% Fib retrace of 0.92253 to 0.82970 fall). Bullish invalidation on break below 200-DMA.
- May’s final manufacturing PMI prints from the UK and eurozone will be in focus.
- Analysts are looking for the UK manufacturing PMI to hold onto last month’s gains. Any disappointment will weigh heavily on the pound.
- Risk-off environment which remains prevalent on the back of political uncertainty stemming out of the UK keeps GBP subdued.
Support levels - 0.87, 0.8651 (38.2% Fib), 0.8597 (200-DMA), 0.8571 (20-DMA)
Resistance levels - 0.8761 (50% Fib), 0.8787 (Mar 13 high), 0.8852 (Jan 16 high)
Recommendation: Good to go long on break above 0.8762, SL: 0.8650, TP: 0.8790/ 0.8850/ 0.8870
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 101.703 (Bullish), while Hourly GBP Spot Index was at -1.30421 (Neutral) at 0730 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
