Friday’s trade saw EUR/GBP within the range of 0.7478-0.7539. The daily high has also been the highest level since January 23rd, when a high of 0.7584 was recorded. The pair closed at 0.7491, losing 0.29% on a daily basis.
At 7:30 GMT today EUR/GBP was up 0.18% for the day to trade at 0.7510. The pair touched a daily high at 0.7511 at 7:29 GMT.
Fundamentals
Euro area
Manufacturing data
Spanish Manufacturing Purchasing Managers’ Index (PMI) probably showed a slight improvement in January, coming in at a reading of 54.2 from 53.8 in December. If so, this would be the 14th consecutive month, when the PMI remains in the zone above 50.0, indicating optimism (increasing activity). The official reading is to be published at 8:15 GMT.
Activity in Italy’s sector of manufacturing probably improved in January, with the corresponding PMI rising to 49.0, as expected by experts. In December the PMI plunged to 48.4, which has been the lowest reading since May 2013, when the gauge was reported at 47.3. Markit Economics is expected to release the official data at 8:45 GMT.
France’s final manufacturing PMI probably remained in the zone of contraction for a ninth consecutive month during January, while confirming the preliminary PMI reading of 49.5, which was reported on January 23rd. In December the PMI came in at a final value of 47.5, which has been the lowest level since August 2014, when the gauge was reported at 46.9. The final PMI data is due out at 8:50 GMT.
The final reading of German manufacturing PMI probably confirmed the preliminary value for January, with the index coming in at 51.0. In December the final PMI stood at 51.2, also confirming the preliminary reading. Markit will release the final PMI data at 8:55 GMT.
The final manufacturing PMI in the Euro zone probably also confirmed the preliminary value in January, with the index remaining at 51.0. If so, this would be the highest level since July 2014, when the indicator was reported at a final 51.8. In December the final PMI was registered at 50.6. The PMI reflects the performance of the manufacturing sector in the Euro area and is based on a survey of 3 000 manufacturing companies. National data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. These member states together account for almost 90% of the Euro zone’s manufacturing activity. The Manufacturing Purchasing Managers Index is comprised by five individual indexes with the following weights: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stock of Items Purchased (10%), as the Delivery Times index is inverted, so that it moves in a comparable direction.
In case the final PMI readings exceeded expectations, the common currency would receive a boost. The official manufacturing data for the Euro region as a whole is scheduled to be released at 9:00 GMT.
United Kingdom
Manufacturing PMI
Activity in United Kingdom’s sector of manufacturing probably slightly improved in January, with the corresponding PMI coming in at a reading of 52.8, according to the median forecast of experts, up from 52.5 in December. If so, this would be the 23rd consecutive month, when the PMI stood above the key level of 50.0. The index is based on a survey, encompassing managers of companies, that operate in sectors such as manufacturing, mining, utilities. They are asked about their estimate in regard to current business conditions in the sector in terms of new orders, output, employment, demand in the future. Values above 50.0 signify that respondents are rather optimists than pessimists. Higher-than-projected PMI readings would boost demand for the sterling. The Chartered Institute of Purchasing and Supply (CIPS) is expected to announce the official reading at 9:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7503. In case EUR/GBP manages to breach the first resistance level at 0.7527, it will probably continue up to test 0.7564. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7588.
If EUR/GBP manages to breach the first key support at 0.7466, it will probably continue to slide and test 0.7442. With this second key support broken, the movement to the downside will probably continue to 0.7405.
The mid-Pivot levels for today are as follows: M1 – 0.7424, M2 – 0.7454, M3 – 0.7485, M4 – 0.7515, M5 – 0.7546, M6 – 0.7576.
In weekly terms, the central pivot point is at 0.7477. The three key resistance levels are as follows: R1 – 0.7553, R2 – 0.7614, R3 – 0.7690. The three key support levels are: S1 – 0.7416, S2 – 0.7340, S3 – 0.7279.
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