EUR/GBP Could Trade Further Higher Toward 0.908006 September, 2018 by Aayush Jindal in Market Analysis
- The Euro found fresh bids near the 0.8940 level and recovered against the British Pound.
- There was a break above a major bearish trend line with resistance at 0.9010 on the 4-hour chart of EUR/GBP.
- The Euro Zone Services PMI in August 2018 remained stable at 54.4.
- Today, the US ADP Employment Change for August 2018 will be released, which is forecasted to post an increase of 190K.
EURGBP Technical Analysis
The Euro declined sharply from the 0.9080-90 resistance during the last week of August 2018 against the British Pound. The EUR/GBP pair found support near 0.8940 and later recovered nicely.
Looking at the 4-hours chart, the pair started found a strong buying interest near the 0.8940 level and the 200 simple moving average (green, 4-hours). The pair bounced back and broke the 0.9000 resistance zone.
During the rise, the pair also cleared a major bearish trend line with resistance at 0.9010. Moreover, the pair settled above the 100 simple moving average (red, 4-hours) plus the 50% Fib retracement level of the last slide from the 0.9098 high to 0.8937 low.
On the upside, the next major resistance is near the 0.9060 level, which is the 76.4% Fib retracement level of the last slide. Above 0.9060, the pair could rise towards the 0.9080 level.
On the other hand, if the pair corrects lower, it may well find support near the previous resistance at 0.9000 and the 100 SMA at 0.8990.
Recently, the Euro Zone Services PMI for August 2018 was released by the Markit Economics. The market was looking for no change in the PMI from the last reading of 54.4.
The actual result was similar to the forecast as the Euro Zone Service PMI came in at 54.4. However, the Final Eurozone Composite Output Index rose from 54.4 to 54.5 in August 2018.
Overall, the EUR/GBP pair remains supported on dips near 0.9000 and 0.8990. Looking at EUR/USD, the pair recently tested the 1.1520 support and it is currently consolidating in a range.
Economic Releases to Watch Today
- German Factory Order for July 2018 (MoM) – Forecast +1.8%, versus -4.0% previous.
- US Initial Jobless Claims – Forecast 214K, versus 213K previous.
- US ADP Employment Change August 2018 – Forecast 190K, versus 219K previous.
- US Factory Orders July 2018 (MoM) – Forecast -0.6%, versus +0.7% previous.
- US ISM Non-Manufacturing Index for August 2018 – Forecast 56.8, versus 55.7 previous
- Us Services PMI for August 2018 – Forecast 55.2, versus 55.2 previous.