Brocker.Org: EUR/GBP hitting a brick wall within bullish territory; eyes on 0.8852?

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Currently, EUR/GBP is trading at 0.8633, down -0.08% on the day, having posted a daily high at 0.8678 and low at 0.8622.

EUR/GBP has been on the bid in a strong rally taking up bullish flows in the euro vs the dollar in recent sessions.  At the same time, the European economy is performing better and the ECB is tipped to taper their programmes in time to come. Merkel’s comments over the weakness of the euro is also a major pivotal point for the current status quo that had underpin euro strength.

Today, the European growth continued at a solid pace according to Markit flash estimates, with regional PMIs advancing further in May as Valeria Bednarik, chief analyst at FXStreet pointed out. “Growth in the services sector, however, was slightly below expected, but overall the composite figures came above expected. The German IFO survey showed that business confidence remains strong, with the index up to 114.6 from previous 113.0.”

Eurozone: Economy on a high as composite PMI maintained a 6 year high – ING

In respect to the pound, the terror attack in Manchester comes just two weeks before the scheduled snap election and was on the eve of when the public could register to vote in the UK. Coupled with the Westminster attack at Parliament in March, all this weighs on investor’s sentiment around the UK. PM May has suspended campaigning activities while the government aligns across the nations of the UK to deal with the latest atrocities in Great Britain.  Next Thursday the UK data will be under the microscope with Q1 GDP revisions.

EUR/GBP levels

EUR/GBP lost the bid today with cable running higher. EUR/GBP has eroded the 200-day ma at 0.8597 to the upside that does open up the 2017 channel at 0.8711. A break of that will open up the 0.8852 January high, this, all according to analysts at Commerzbank. to the downside, they argue, “Last week’s low at 0.8524 guards the 0.8383 May low and failure here will retarget key support at 0.8334/04. If slipped through, the 0.8252 the July 2016 low would be in focus.”

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