The euro cross has failed to footing above 0.9000 last two weeks and shifted into consolidation mode. Market participants are a remaining focus on the Conservative Party leadership contest outcome.
- UK manufacturing PMI fell to its lowest level since February 2013 according to the official release. The reading fell to 48.00 in June from 49.4 in May.
- UK Services PMI down from 51.00 to 50.0 in June, the lowest reading in 3 months.
Data preview: For the UK, we will get a monthly GDP estimate (Wednesday).
Commenting on the Services PMI Chris Williamson said, “The June reading rounds off a second quarter for which the surveys point to a 0.1% contraction of GDP.”
Danske Bank said, “we remain, sceptic, that the economy can maintain its 0.5% q/q growth momentum from Q1.”.
The daily RSI indicator is bearish, and the oscillator is also downbeat, caution remains in order with an eye on the support at 0.8920. A break below last week’s low would open the door to the next support finds at 0.8870.
A decisive trade below 0.8870 will drag prices towards 0.8800-0.8770 levels.
Flipside, a decisive break above 0.9030 could open the room for 0.9100. In the medium term, the cross will probably touch the 0.9100 level earlier double top pattern before retracing.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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