Daily Market Report – EUR/GBP Lifted By Euro-zone Data September 22, 2017

EUR/GBP is trading in the green and tries to stay above dynamic support despite the yesterday’s breakdown. It has managed to erase the yesterday’s losses and is struggling to stay much above the 0.8773 previous low. Technically, it is expected to drop further on the short term because is located under some important dynamic support levels.

The Euro remains strong on the short term, has managed to increase also versus the USD and versus the CHF. The Cable has lost ground versus the Euro as the Euro-zone data have impressed in the European session. The Flash Manufacturing PMI increased from 57.4 points to 58.2 points, signaling that the expansion continues in the manufacturing sector, while the Flash Services PMI is expected to increase from 54.7 to 55.6 points, beating the 54.7 estimate.

The German and French Flash Manufacturing PMI and the Flash Services PMI have come in better than expected as well.

Price rallies aggressively and tries to stay above the 100% Fibonacci level. A false breakdown below the mentioned level will signal an increase at least till the third warning line (wl3) of the former descending pitchfork. We may have a minor sideways movement here before will decide where to go. A drop towards the lower median line (LML) was expected, but it could come to retest the median line (ML) as well before will drop again.

GBP/USD Minor Retreat Still In Cards

Price has decreased sharply and is almost to erase the yesterday’s gains. It has failed to resume the upside movement and now is located under the 150% Fibonacci line (ascending dotted line). I’ve drawn a minor red descending pitchfork, a retest of the upper median line (uml) could signal another leg lower on the short term. Only a breakout above the upper median line (uml) will invalidate another drop.

EUR/CHF Poised For More Gains

The currency pair has extended the upside momentum and seems determined to climb much higher on the short term. The next upside target will be at the second warning line (wl1) of the minor ascending pitchfork. Only a failure to reach the mentioned line will signal an exhaustion and a potential drop.

By Olimpiu Tuns

Market Analyst

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