Key Highlights
- The Euro struggled near 0.8840 and later declined against the British Pound.
- There was a break below a major bullish trend line with support at 0.8770 on the 4-hours chart of EUR/GBP.
- Germany’s PPI for Jan 2019 increased 0.4% (MoM), compared with the -0.2% forecast.
- The Euro Zone Manufacturing PMI for Feb 2019 (Preliminary) will be released today, which could decline from 50.5 to 50.3.
EURGBP Technical Analysis
After a major decline, the Euro rebounded above the 0.8700 resistance against the British Pound. The EUR/GBP pair even traded above the 0.8800 level, but it struggled to break the 0.8840 level.
Looking at the 4-hours chart, the pair failed near the 0.8840 and the 200 (green) simple moving average (4-hours). Later, there was a sharp bearish reaction and the pair declined below the 0.8800 and 0.8770 support levels.
There was also a break below a major bullish trend line with support at 0.8770. Sellers gained traction below the 50% Fib retracement level of the last wave from the 0.8617 low to 0.8839 high.
The pair settled below the 0.8750 support and the 100 (red) simple moving average (4-hours). Should EUR/GBP slide below 0.8670 and the 76.4% Fib retracement level of the last wave from the 0.8617 low to 0.8839 high, there could be more losses towards the 0.8620 and 0.8600 support levels.
On the other hand, if there is a fresh upward move, the pair could face sellers near the 0.8740 and 0.8750 levels in the near term.
Fundamentally, the German Producer Price Index report for Jan 2019 was released by the Statistisches Bundesamt Deutschland. The market was looking for a 0.2% decline in the PPI in Jan 2019, compared with the previous month.
However, the result was positive as there was a 0.4% rise in the PPI. Looking at the yearly change, there was a 2.6% rise, more than the 2.2% forecast.
The result helped EUR/USD and EUR/GBP to recover. However, EUR/GBP is likely to struggle in the near term as long as it is trading below the 0.8750 resistance.
Economic Releases to Watch Today
- German Consumer Price Index for Jan 2019 (YoY) – Forecast +1.4%, versus +1.4% previous.
- German Consumer Price Index for Jan 2019 (MoM) – Forecast -0.8%, versus -0.8% previous.
- Germany’s Manufacturing PMI for Feb 2019 (Preliminary) – Forecast 49.7, versus 49.7 previous.
- Germany’s Services PMI for Feb 2019 (Preliminary) – Forecast 52.9, versus 53.0 previous.
- Euro Zone Manufacturing PMI Feb 2019 (Preliminary) – Forecast 50.3, versus 50.5 previous.
- Euro Zone Services PMI for Feb 2019 (Preliminary) – Forecast 51.4, versus 51.2 previous.
- US Manufacturing PMI for Feb 2019 (Preliminary) – Forecast 54.7, versus 54.9 previous.
- US Services PMI for Feb 2019 (Preliminary) – Forecast 54.3, versus 54.2 previous.
- US Initial Jobless Claims – Forecast 229K, versus 239K previous.
