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EUR/GBP testing 0.7800

FXStreet (Edinburgh) - EUR/GBP is now coming under renewed selling pressure following the release of the manufacturing PMI in the UK economy.

EUR/GBP in 5-week lows

The cross is testing the key support at 0.7800 at the beginning of the week, dragged lower after the manufacturing PMI in the British economy surprised investors to the upside during October, coming in at 53.2 vs. September’s 51.6. Next of note for GBP will be Wednesday’s more significant Services PMI ahead of the BoE meeting due on Thursday. In the opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, “Rallies will find initial resistance at .7911 and key resistance is the 2 year pivot line and the 2013-2014 downtrend at .8039/85 – while capped here we are longer term still negative”.

EUR/GBP relevant levels

The cross is now losing 0.29% at 0.7808 and a breakdown of 0.7791 (low Oct.2) would expose 0.7767 (2014 low Sep.30). On the upside, the immediate hurdle aligns at 0.7861 (low Oct.30) ahead of 0.7874 (61.8% of 0.7767-0.8046).

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