Key Points
- The Euro after trading towards the 0.7775 level vs the British Pound found sellers and started to move down.
- There is a bearish trend line formed on the hourly chart of the EURGBP pair, which is acting as a resistance.
- The Euro Zone PMI service released by the Markit Economics posted a rise from the last reading of 53.1 to 53.3 in May 2016.
- The German Services PMI was also released, which remained unchanged at 55.2 in May 2016.
Technical Analysis
The Euro looks like correcting vs the British Pound, and following a bearish trend line formed on the hourly chart of the EURGBP pair. The pair also closed below the 50 hourly simple moving average, which is a bearish sign.
However, the pair is currently trading near the 50% Fib retracement level of the last leg from the 0.7671 low to 0.7776 high, which is acting as a support.
If the Euro bulls manage to break the trend line resistance, then a move towards the last swing high is possible in the short term.
Euro Zone Services PMI
Today in the Euro Zone, there were a couple of important releases lined up, including the Euro Zone Services PMI, which is an indicator of the economic situation in the Euro Zone services sector by the Eurostat. The market was not expecting any change in the PMI from 53.1 in May 2016. However, the result was positive, as there was a rise to 53.3.
The report added that the “The upturn was again led by the service sector, which saw a modest growth acceleration. Manufacturing production also continued to rise, albeit at a slightly lesser pace than in April“.
Overall, there is a chance that the EURGBP pair may gain bids, and if it breaks the trend line, then a move towards 0.7775 is possible.
