Fundamental Analysis of EUR/GBP for February 1, 2018

EUR/GBP has been volatile and corrective recently, residing inside the support of 0.87 to the 0.8750 area. Due to the recent mixed economic reports of both EUR and GBP, the market sentiment has been quite indecisive with the upcoming directional momentum in the pair and lower liquidity at the end of the first month of 2018. Today, EUR Spanish Manufacturing PMI report was published with a decrease to 55.2 from the previous figure of 55.8 which was expected to be at 55.7, Italian Manufacturing PMI showed an increase to 59.0 from the previous figure of 57.4 which was expected to be at 57.7, French Final Manufacturing PMI report showed a slight increase to 58.4 which was expected to be unchanged at 58.1, German Final Manufacturing PMI report showed a slight decrease to 61.1 which was expected to be unchanged at 61.2, and EUR Final Manufacturing PMI was published unchanged at 59.6. Though the economic reports were quite mixed but it was quite sufficient to counter against GBP worse economic report result to gain momentum. Today, GBP Manufacturing PMI report was published with a decrease to 55.3 from the previous figure of 56.2 which was expected to increase to 56.5. The worse economic report of GBP results in a sudden change in the market sentiment which leads to bearish rejection after an impulsive bearish pressure formed recently. As of the current scenario, the further correction is expected to be observed in the pair until EUR or GBP come up with better economic reports to support the gains on either side of the market with impulsive and consistent momentum.

Now let us look at the technical view. The price is currently quite volatile and corrective above the support area from 0.87 to 0.8750. The price is squeezing downwards with respect to the dynamic level of 20 EMA and Downward sloping Trend Line which is expected to push the price lower after any bullish pressure reaches it in the process. If the price breaks below the 0.8700 support level with a daily close, impulsive bearish pressure is expected in this pair with the target towards 0.8400.

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The material has been provided by InstaForex Company - www.instaforex.com