Eurgbp Drops On Euro Weakness

 Eurgbp Drops On Euro Weakness

EUR/GBP Drops Under 0.8750 On Euro Weakness

In the last week, the EUR/GBP attempted to touch fresh highs but failed in the process. Now, the pair has gone back under the 0.8750 level amid an apparent EUR weakness. At the same time, it is also a sign of Pound Sterling (GBP) strength, which is sending the pair lower.

The economic calendar this week is very thin in regards to the Euro and the GBP. As a result, there will be little movement during the first half of the week. However, the 2nd half of the week will showcase the PMI reading for the UK and the EU area.

According to analysts, the PMI readings from the EU will show a little improvement. On the other hand, the PMI readings from the UK are expected to be at the same level as the last readings.

EU PMIs Expected To Improve

In addition, the composite PMI (EU) is also expected to move towards 46.9 from an earlier value of 46.5. Similarly, the manufacturing & services PMI is also expected to show an uptick.

As for the UK, the PMI from the S&P Global will likely be around 48.7, which is the reading of the last month. As for the services component, it will also be around 49.5. In addition, the manufacturing part of the PMI will be around 45.0 from an earlier value of 44.8.

If we look at the EUR's performance against other currencies today, it looks like the EUR lost the most against the JPY. In a sense, we can say that the EUR weakness is broader & can be seen in multiple pairs.

Although the EUR/GBP has shown weakness on Monday & Tuesday, it is still above the long-term SMA (200). This is a sign that the EUR remains well-bid despite the short-term weakness.

In fact, the EUR/GBP touched 0.8766 just a week ago, which is a 6-month high. So even if the EUR/GBP is showing short-term weakness, we shouldn't forget about the long-term trend.

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