EUR/GBP Following Technicals With the UK and EU Economies in the Same Doldrum
The economy of the Eurozone has seen some fast deterioration this year and the ECB has increased the dovish remarks, but EUR/GBP has been making decent gains for nearly two months, having turned upward by the middle of September. However, a similar picture is unfolding in the United Kingdom, with the economic data indicating worsening economic weakness and the Bank of England returning to the sidelines. However, this pair remains bullish on the long-term charts.
During this time, the EUR/GBP has gained more than 250 pips, with lows rising, providing us with solid opportunities to buy this pair, such as the one yesterday when the price retreated lower to the 200 SMA (purple) on the H4 chart. This moving average has been acting as support and yesterday we decided to open another buy EUR/GBP signal at this moving average.
The data calendar from the UK and the Eurozone is light early this week, leaving traders to wait for Tomorrow’s manufacturing and services Purchasing Managers’ Index (PMI) readings, although the EUR and the GBP are likely to remain unfazed by this data, since there won’t be any major surprise. European PMIs are likely to rise slightly, while UK PMIs are expected to remain close to prior levels.
The EU HCOB Composite PMI for November is predicted to rise from 46.5 points to 46.9 points, with both the Services and Manufacturing components improving somewhat. The UK S&P Global/CIPS November Composite PMI is predicted to remain unchanged at 48.7 points, with the Services component remaining unchanged at 49.5 points and the Manufacturing component improving very slightly from 44.8 to 45.0 points, which should be positive for this pair. So, we are already long here, now comes the waiting game for the buyers to resume the uptrend.
EUR/GBP Live Chart
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