EUR/GBP chart - Trading View
Spot Analysis:
EUR/GBP was trading 0.12% higher on the day at 0.8591 at around 08:55 GMT.
Previous Week's High/ Low: 0.8589/ 0.8483
Previous Session's High/ Low: 0.8589/ 0.8549
Fundamental Overview:
Data published by IHS/Markit research showed earlier on Monday that German manufacturing sector slows its pace of expansion in August, but holds firmly inside growth territory.
German Manufacturing PMI came in at 62.7 in August vs. 65.0 expected and 65.9 prior. Services PMI dropped from a record high of 61.8 to 61.5 in August as against 61.0 estimated.
IHS Markit Flash Germany Composite Output Index arrived at 60.6 in August vs. 62.2 expected and July’s 62.4, its lowest level in two months.
On the other side, UK PMI data shows recovery slowed sharply in August. Survey by IHS Markit/CIPS showed flash composite PMI dropped to 55.3 from 59.2 in July, missing estimates at 58.4.
UK flash manufacturing PMI for August slipped to 60.1 from the previous month's 60.4, but was marginally better than estimates at 59.5.
Technical Analysis:
- EUR/GBP was extending gains above 21-EMA and into the daily cloud
- MACD shows bullish crossover on signal line and has edged above zero
- Momentum is bullish, Stochs and RSI are sharply higher
- Volatility is high and rising as evidenced by widening Bollinger bands
Major Support and Resistance Levels:
Support level - 0.8548 (5-DMA), Resistance level - 0.8598 (110-EMA)
Summary: EUR/GBP is posed for further upside. Price action pivotal at cloud and 110-EMA resistance. Decisive break above will propel the pair higher. Next major bull target lies at 23.6% Fib at 0.8634 ahead of 200-DMA at 0.8703.
