EUR/GBP clears daily gains after European Services PMIs

Following the release of European Services Purchasing Managers Index (PMI) data, the EUR/GBP relinquished its daily gains. The pair initially reached a high of 0.8575, where the 20-day Simple Moving Average (SMA) stands, but later retreated to 0.8550, reaching the lowest level in a week. Disappointing results from German, French, and Spanish Hamburg Commercial Bank (HCOB) Services PMIs contributed to the reversal, while the British index met expectations by standing in expansion territory.

Euro lost ground after disappointing EZ Services PMIs.

During the European session, the HCOB reported that June's French and Spanish Services PMIs were below expectations at 47.2 and 53.4, respectively. In addition, the German and Italian indexes remain unchanged concerning their previous figures at 54.1 and 52.2, respectively. Overall the Eurozone’s figure came in at 52, vs the 52.4 expected, reflecting a deceleration but remaining in the expansion area.

Conversely, the British Service PMI released by the Chartered Institute of Purchasing & Supply (CIPIS) and the S&P Global came in at 53.7, just as expected.

For the rest of the week, investors will keep an eye on Thursday’s release of Retail Sales from the Eurozone from June and European Central Bank’s De Guindos and Lagarde’s speeches on Friday. On the British Calendar, market participants will see the Construction PMI release from June and Housing data on Friday from June. 

EUR/GBP Levels to watch

According to the daily chart, the technical outlook favours the bears. Bulls struggle to reignite their momentum as the Moving Average Convergence Divergence (MACD) prints decreasing green bars while the Relative Strength Index (RSI) points south, in negative territory.

Support Levels to watch: 0.8540, 0.8525, 0.8520

Resistance Levels to watch: 0.8575 (20-day SMA), 0.8590, 0.8600

EUR/GBP Daily chart