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Forex: EUR/GBP tumbles on disappointing German PMI

FXstreet.com (Barcelona) - Investors were hoping for the best after the upside surprise in the French PMI services, with the flash figure rising from 41.3 to 44.1 and above 42.0 consensus in April. In reaction to that and ahead of the European session, the EUR/GBP rose to 0.8568 high. However, the publication of the German data triggered a 50-pip drop as both manufacturing and services fell against expectations.

The preliminary release of April German manufacturing PMI was expected to stay unchanged at 49.0 but dropped to 47.9 and services PMI eased from 50.9 to 49.2, instead of the slight rise to 51.0 as expected.

The cross has fallen to 0.8520 so far. “We suspect the 0.8650/65 (cloud+Fibo resistance) will curb the topside for a slide back to the 0.8491 short term uptrend and the base of the cloud at 0.8456”, wrote Commerzbank analyst Karen Jones.

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