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EUR/GBP tests highs above 0.7890

FXStreet (Edinburgh) - A better tone in the common currency is now lifting EUR/GBP to print fresh session highs beyond 0.7890.

EUR/GBP boosted by PMI surprises

The cross is seeing its upside renewed after manufacturing PMI prints in the euro area surprised investors to the upside during September. In fact, the more relevant German and EMU releases bettered forecasts advancing to 51.8 and 50.7, respectively. Next of note will be UK retail sales for the month of September, with consensus expecting headline sales to have expanded at an annual pace of 2.8%. According to Dmytro Bondar, Technical Analyst at RBS, the cross “is likely to stay in a channel… but overall remains posed for more upside amid inside week at the start of October and clear bullish divergence with MACD”.

EUR/GBP levels to watch

As of writing the cross is advancing 0.18% at 0.7895 with the next resistance at 0.7920 (10-d MA) followed by 0.7926 (high Oct.22) and then 0.7942 (high Oct.21). On the downside, a breach of 0.7851 (low Oct.10) would aim for 0.7833 (76.4% of 0.7767-0.8046) and finally 0.7791 (low Oct.2).

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