The release of the flash PMI indices for January from the EU and UK were the main data releases for the European morning session today. Data from France and Germany proved mixed. The situation in the French data is diametrically opposed to that in the German figures – the manufacturing index beat expectations, while the services gauge came in below estimates. While economists noted that price pressures continue to mount in Germany’s services sector, they also pointed out that a recession in the euro zone’s biggest economy remains highly unlikely. In terms of UK data, the reading also turned out to be mixed, with the manufacturing sector beating estimates and services coming in below expectations. Nevertheless, the GBP fell on the release as new data after retail sales and labor market figures showed that the economic situation in the UK has worsened.
Production: 50.8 vs. 49.7 expected (49.2 previously)
Services: 49.2 vs. 49.9 expected (49.5 previously)
Production: 47.0 vs. 47.8 expected: (47.1 previously)
Services: 50.4 vs. 49.6 expected (49.2 previously)
The United Kingdom
Manufacture: 46.7.0 vs. 45.6 expected: (45.3 previously)
Services: 48.0 vs. 49.9 expected (49.9 previous)
EUR and GBP weakened after mixed PMI releases, but GBP’s decline outpaced EUR. As a result, the EURGBP currency pair may trade higher today. The pair is trading up 0.6% on the day, extending a rally launched after a failed attempt to break below the support zone in the 0.8725 area, marked by a 50-session moving average and earlier price reactions. If the bulls remain in check, the nearest area of resistance is to be seen above the 0.8850 mark.
EURGBP D1. Source: xStation5
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