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Forex: EUR/GBP on “red” after UK data

FXstreet.com (Barcelona) - Following the trend, the UK saw its final reading of March manufacturing PMI by Markit coming in contractionary at 46.8, from 47.9 and below 46.6 consensus. Ahead of the release, the EUR/GBP had dropped below the opening price and printed a low at 0.8426. Expectations ahead of the UK data and disappointment from the European pulled the cross from its high at 0.8452.

UK money supply fell -0.5% in February, instead of rising 1.1% as expected. The annualized figure improved from -0.8% to +0.5%. Net Lending to Individuals rose £1.6B, beating £0.9B consensus. Consumer credit rose £0.6B, above expectations of £0.3B. Mortgage Approvals disappointed by easing from 54.187K (revised from 54.719K) to 51.653K (consensus at 54.000K).

The German manufacturing PMI 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). The Italian manufacturing PMI 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 Spanish figure fell from 46.8 to 44.2 (consensus at 46.0). Investors will be awaiting the German CPI report.

“We note that the Elliott wave count is indicating that 0.8417 is the low for this short term move lower. This is a conflicting signal and we would allow for a near term rebound towards the 55 day ma at 0.8568”, wrote Commerzbank analyst Karen Jones, suggesting tiny longs at market and place a stop below 0.8415, with exit at 0.8565.

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