UK Services PMI higher than expected, with the reading rising to 54.9 (median 54.4). The rebound from the 29-months low of 53.3 in the previous month came on the heel of the much better than expected manufacturing number earlier in the week and brought the composite to 55.4, up from 53.3 in September. So the pace of economic expansion is accelerating across both manufacturing and services sectors and while the construction PMI, released yesterday, eased, slightly it also remains at high levels. More arguments then for the BoE to follow the Fed and keep the implicit tightening bias in place.
EURGBP is has dropped over the last four weeks near July pivotal lows. This suggests that the we need to focus on the potential support levels. The nearest support level is at 0.7027 while the 0.6918 – 0.7000 bracket marks a pivotal support from August this year. The fact that EURGBP is approaching supports has caused 60 min time frame to create a wedging formation. At the time of writing the pair is trading at the supporting end of the wedge. This market is still in a sell the rallies mode with the nearest resistance levels at 0.7093 and 0.7105. The nearest 240 min support is at 0.7060 while the next daily support can be found at 0.7027.
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
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