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Forex: EUR/GBP erases gains after poor manufacturing PMI in Europe

FXstreet.com (Barcelona) - The EUR/GBP was subject of demand earlier, ahead of the London opening, as the market was getting ready for the Markit manufacturing PMI data. The cross peaked at 0.8452 high and quickly retraced it all back to the opening price at 0.8436 ahead of the UK data, including manufacturing PMI and money supply.

The final reading of the March manufacturing PMI by Markit was even worse than expected. The Spanish figure fell from 46.8 to 44.2 (consensus at 46.0), the Italian figure eased from 50.8 to 48.3 (consensus at 50.2). The French number had a slight upward move, from 43.9 to 44.0, but still contractionary. The German data came in slightly higher than expected, at 49.0 from 50.3 (consensus at 48.9). It still doesn’t hide the fact that manufacturing turned contractionary in March. The EMU figure eased from 47.9 to 46.8 (consensus of 46.6).

UBS analysts are bearish: “The risk is for extension of weakness to test support at 0.8362 in the near-term, a breach of which would open 0.8285”, wrote analyst Gareth Berry, pointing to resistance at 0.8499 ahead of 0.8561.

EMU: PMI Manufacturing contracts further in March

Eurozone PMI Manufacturing fell to 46.8 points in March, from 47.9 points in February, according to data released today by Markit. This result is more positive than the projected decline to 46.6 points.
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