EUR/GBP jumps to one-week highs above 0.8820, after UK data

• Preliminary PMI data for January beats expectations in January.
• UK PMI mixed with unexpected decline in services.
• Pound weakens behind the data, EUR/GBP returns above the 20-day MA.

The EUR/GBP is rising for the fourth day in a row, boosted on Tuesday by a broadside drop in sterling following economic data. The cross is trading in the 0.8825 area, the highest level in a week.

The advance comes after the PMI reports from the Eurozone and the United Kingdom. Preliminary data for January from the Eurozone showed an improvement in the manufacturing index from 47.8 to 48.8, while the services index improved from 49.8 to 50.7. For its part, the United Kingdom showed a drop in services from 49.9 to 48, the lowest level in two years; while the manufacturer improved from 45.3 to 46.7.

This data from the United Kingdom is added to others that show weakness in the British economy. This is putting pressure on the British pound, which among the G10 is the worst performer on Tuesday.

Added to the above is the fact that it became known that the public accounts worsened in December with a record debt of 27.4 billion pounds, well above the 17.75 billion expected.

EUR/GBP’s rise accelerated after the data, going from 0.8785 to rise to 0.8826, the highest in a week and above the 20-day average that passes through 0.8815. If it continues higher, the next strong resistance is seen at 0.8860. In the opposite direction, to lose 0.8775, the bearish pressure would be relieved.

technical levels