EUR/GBP Forecast – Euro Correcting Lower Towards 0.8920 Vs British Pound

EUR/GBP Forecast – Euro Correcting Lower Towards 0.8920 Vs British Pound

  • – The Euro after trading as high as 0.8994 against the British Pound started a downside move.
  • – There are two important bullish trend lines with support near 0.8910 forming on the hourly chart of EUR/GBP.
  • – Today in the Euro Zone, Manufacturing Purchasing Managers Index (PMI) for July 2017 (Preliminary) was released by the Markit Economics.
  • – The outcome was below the forecast, as there was a decline in the PMI from the last reading of 57.4 to 56.8.

 

Euro Zone Manufacturing PMI

Today in the Euro Zone, Manufacturing Purchasing Managers Index (PMI) for July 2017 (Preliminary) was released by the Markit Economics. The market was positioned for a decline from the last reading of 57.4 to 57.2.

 

The actual result was below the forecast, as there was a decline in the PMI from the last reading of 57.4 to 56.8. Moreover, the headline IHS Markit Eurozone PMI was down for the second time and now sits at 55.8. The report added that:

Despite coming off recent highs, the index remained at an elevated level by historical standards and signaled one of the strongest expansions seen over the past six years.

 

Overall, the EUR/GBP pair may correct a few pips towards 0.8820-10, but likely to gain bids on the downside.

 

EUR/GBP Technical Analysis

The Euro was in a solid uptrend from the 0.8700 swing low against the British Pound and traded above the 0.8800 handle. The uptrend in the EUR/GBP pair was such that the pair even traded close to the 0.9000 handle.

 

EUR/GBP Technical Analysis Euro British Pound

 

A high was formed near 0.8994 where the pair faced strong offers and a correction wave was initiated. The pair is now below the 23.6% Fib retracement level of the last wave from the 0.8833 low to 0.8994 high.

 

On the downside, there are two important bullish trend lines with support near 0.8910 forming on the hourly chart of EUR/GBP along with the 100 hourly simple moving average. Moreover, the 0.8915 level is the 50% Fib retracement level of the last wave from the 0.8833 low to 0.8994 high.

 

So, if the pair continues to move down, there can be strong buy zones near 0.8825, 0.8820 and 0.8810 in the short term.

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