Today we have the EU and UK Service PMI numbers coming out with a 30-minute difference.
The European Services PMI is expected to stay the same at 55, where the UK’s figure is forecast to slightly diminish by half a point. It is expected that the new figure could go down from 54.5 to 54. The previous month’s figure of 54.5 was a good rise from January’s 53 mark, even though the expectations then were that the Services PMI could only rise to 53.3. Certainly, the number must still pick up the pace, in order to get back to the highs of Autumn 2013.
UK’s services accounts for around 80% of the country’s economic output, hence why it is so heavily monitored by economists and traders.
Germany, Sweden, Ireland, Spain and France are also joining the group of those, whose Service PMI figures will be out today, during the morning of the European trading session.
EUR/GBP – Technical Outlook
The EUR/GBP had a choppy session yesterday, potentially stopping out traders from their positions. We can see that for now, the pair is struggling to break below the 0.87150 level, which is acting as a strong support. Overall, the EUR/GBP is still within a downwards moving channel, but recently, it looks like the pair started to form a range between approximately 0.87 and 0.88.
EUR/GBP is creating some interest with a potential range formation. If this sideways price action continues for quite a while, then the potential to trade a breakout becomes quite significant. We are neutral on this pair for now, but we are keeping a close eye on the potential breaking points outside of the aforementioned range.
If we see a break below the current support level of 0.87150, then we could potentially see a slight pull towards the 0.87 mark, which would be the bottom side of the range. A break below, could trigger some further selling activity, that could push the price towards the bottom side of the long-term downwards moving channel, that started around the 26th of September last year.
Alternatively, a move back up to the 0.87550 level could mean that the bulls are not ready to give up on this pair. A break above that level could open the path towards the 0.87900 or even the 0.88 areas. If these levels of resistance prove not to be strong enough to withhold the price from accelerating, then we might see a break outside of the aforementioned range and move higher.
