• With only 24 days on hand and no agreement on the paper with the EU, raising the odds of an extension of the Brexit deal line is highly possible.
  • Another meaningful Brexit vote will be on March 12, just two and a half weeks to the deadlock. As usual, we watch out for the headline of the latest Brexit developments.

Data review:

UK manufacturing PMI fell to a four-month low of 52.0 in February, down from a revised reading of 52.6 in January, IHS Markit reported.

Commenting on the February survey, Duncan Brock said: “The UK manufacturing sector continues to suffer the slings and arrows of outrageous fortune as the harsh realities of Brexit uncertainty, challenges in the global economy and a weak pound affected confidence, jobs, and overall activity.”

 Data preview:

With no top-tier data releases, the euro cross traders remain focus on the latest developments of Brexit. Besides this week’s EURGBP trend cast on the ECB meeting outcome.

TECHNICAL OVERVIEW

The EURGBP paused their losses after correcting more than 5.00% this year so far to as low as 0.8530. The euro cross traced out a medium-term price top near 0.9100 in August -December 2018 via the formation of a double top pattern. Based on this fact, we forecast GBP appreciation in January 2019. Since then the cross ran through all the lower targets which we set last month.

Now the daily RSI has stabilized and picked up, underneath the oscillator has been turned bullish. The shift in the sentiment indicates rallies are anticipated towards 0.8650 ahead of the resistance at 0.8690 it’s 20MA and 0.8730. Note that a return above March 01 high 0.8625 level would ease downside pressure. We would look to capitalize on these developments by suing moves to 0.8730 and above 0.8800 as a selling opportunity with support against the February 2019 low at 0.8530/0.8500 serving as an initial target. Below here, the focus will move down to 0.8400 and 0.8300

Support finds at 0.8550 and 0.8530/0.8500 it’s 200EA (Weekly).

It is important to always keep in mind the risks involved in trading with leveraged instruments.

What is your Technical View?

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