- Euro continued to gain momentum against the British Pound, and looks set for more gains.
- The 4-hours chart of the EURGBP pair has a channel pattern formed, which is acting as a catalyst for the upside move.
- The German Manufacturing Purchasing Managers Index (PMI) released by the Markit economics posted a rise from 53.6 to 54.3 in Sep 2016 (preliminary).
German Manufacturing PMI & Fed Rates
There was a major event in the US this week, as the fed interest rates were announced. The central bank kept rates at 0.5%, which resulted in a downside move in the US Dollar. Other currencies such as the Euro and the British Pound gained.
The forecast was slated for a decrease from 53.6 to 53.1 in Sep 2016 (preliminary). However, the result was positive, as there was a rise to 54.3. The report was positive, and helped the Euro in gaining bids.
Commenting on the data, an Economist at IHS Markit, Oliver Kolodseike, stated “The upturn in Germany’s private sector economy is losing further momentum, with latest survey data pointing to the slowest expansion in output for nearly one-and-a-half years”.
EURGBP Technical Analysis
The Euro managed to gain traction recently versus the British Pound and traded above the 0.8550 resistance area. There was a nice upside surge, which helped the EURGBP pair to retain the bullish bias.
The EURGBP pair is currently following an ascending channel pattern on the 4-hours chart, which is helping the Euro bulls to remain in action. Every time there is a dip, the pair finds buyers for an upside move.
It looks like there is a chance of further upsides towards 0.8640-50 levels, as long as the channel pattern is valid. The pair has already closed above the 61.8% Fib retracement level of the last fall from the 0.8691 high to 0.8338 low. It means there is a possibility of a test of the last swing high of 0.8691 as well.
Tags: British Pound, EURGBP Technical Analysis, Euro, German Manufacturing PMI