EUR/GBP surges past 50-DMA, eyeing 0.7900 level

By FXStreet The EUR/GBP pair surged past 50-day SMA resistance to extend its up-move for third consecutive day and is now trading around high point of the day near 0.7890.

The British Pound trimmed its early gains after UK manufacturing PMI showed contraction during April. The Markit/CIPS UK Manufacturing PMI for April dropped below the critical no-change mark of 50.0 to 49.2, marking its lowest level since February 2013. The reading for March was also revised downward to 50.7 from 51.0 registered previously.

Extending its recovery from last week’s low of 0.7735, the EUR/GBP pair surpassed 50-day SMA resistance near 0.7865-70 area and has now moved within striking distance of 0.7900 handle.

Technical levels to watch

A follow through buying interest beyond 0.7900 handle should push the pair towards 0.7925-30 resistance, marked by 50% Fibonacci retracement level of 0.8117-0.7735 downfall. A clear break through this immediate strong resistance seems to open room for further recovery for the pair.

On the downside, previous strong resistance, now turned immediate strong support, at 50-day SMA region near 0.7870-65 region now seems to act as immediate support. Weakness back below 50-day SMA might now negate possibilities of any further recovery, turning the pair vulnerable to drop back towards its …read more

Source:: FX Street