EUR/GBP Holding Crucial Support Near 0.880005 July, 2018 by Aayush Jindal in Market Analysis
- The Euro corrected lower after trading as high as 0.8890 against the British Pound.
- There is a major bullish trend line in place with support at 0.8800 on the 4-hours chart of EUR/GBP.
- The Euro Zone Services PMI in June 2018 increased from the last reading of 55.0 to 55.2.
- Today in the US, the Services PMI for June 2018 will be released, which is forecasted to decline from 56.5 to 55.4.
EURGBP Technical Analysis
The Euro was in a major uptrend from the 0.8720 swing low against the British Pound. The EUR/GBP pair traded above the 0.8880 level before starting a downside correction.
Looking at the 4-hours chart, the pair broke many resistances such as 0.8850 and 0.8880 before forming a high at 0.8890. Later, it corrected below the 38.2% Fib retracement level of the last wave from the 0.8717 low to 0.8890 high.
The decline found support near the 0.8800 level. There is also a major bullish trend line in place with support at 0.8800 on the 4-hours chart of EUR/GBP. Moreover, the 50% Fib retracement level of the last wave from the 0.8717 low to 0.8890 high is at 0.8804.
Therefore, a downside break and close below 0.8800 could accelerate declines and the pair may perhaps move into a bearish zone.
On the flip side, if the pair recovers and moves above 0.8830, it could resume its upside move. Resistances on the upside are at 0.8850, 0.8880 and 0.8890.
Recently in the Euro Zone, the Services Purchasing Managers Index (PMI) for June 2018 was released by the Markit Economics. The market was looking for no change from the last reading of 55.0.
However, the result was better as the PMI increased from 55.0 to 55.2. Moreover, the PMI composite increased from the last reading of 54.8 to 54.9. Overall, the outcome was positive and it could help EUR/USD and EUR/GBP in the short term.
Economic Releases to Watch Today
- US Services PMI for June 2018 – Forecast 55.4, versus 56.5 previous.
- US Initial Jobless Claims – Forecast 225K, versus 227K previous.
- US ISM Non-Manufacturing Index for June 2018 – Forecast 58.3, versus 58.6 previous
- US ADP Employment Change June 2018 – Forecast 190K, versus 178K previous.
- FOMC Meeting Minutes.