It has been a one side way for the euro cross as EURGBP which had jumped to a four-month high of 0.8930 on Monday. The euro cross is extending their six-week running streak and settle above 20MA (Monthly).
- In terms of macro data from last week, UK manufacturing PMI slips whereas Services PMI continued to pick up.
- At 51.0 in May, up from 50.4 in April, UK Services PMI signaled a marginal rise in with the rate of expansion the strongest since February, according to the official data.
- UK manufacturing sector showed increased signs of renewed contraction in May. At 49.4, down sharply from 53.1 in April, according to HIS Markit.
- UK’s Monthly GDP growth was negative 0.4% in April 2019, as the production sector and manufacturing sub-sector contracted, according to ONS.
Looking at the week ahead, it will not be a busy week in terms of UK data but worth to focus the latest UK political developments
The EURGBP outperformed euro crosses by a wide margin for the last month. The daily RSI is getting overbought day by day, whereas the oscillator is remaining bullish. Given the mixed technical outlook, we remain focused on the crucial immediate resistance at 0.8930.
Note that only a break of 0.8930 would extend the current rally towards 0.8965 early March 2018 high which coincides with 80.0% fib reaction.
On the downside, breach of 0.8830-8900 zone shall once again make the bulls vulnerable with a downside target of 0.8700.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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