- The euro rose to a 4-1/2 month peak against the British pound after data showed Eurozone businesses largely withstood the impact of the coronavirus in February, growing at their fastest pace in six months.
- Eurozone IHS Markit’s Composite Purchasing Managers’ Index nudged up to 51.6 in February from January’s 51.3, matching an earlier flash reading.
- Moreover, uncertainty about trade talks between Britain and the European Union and growing expectations for UK interest rate cuts further dented the bid tone around the British pound.
- EUR/GBP is trading 0.1 percent up at 0.8724, having hit a high 0.8744 earlier, its highest since October 15.
- Momentum indicators are bullish: RSI strong at 72, MACD supports upside and Stochs are biased higher.
- Immediate resistance is located at 0.8756, a break above could take it near 0.8772.
- On the downside, support is seen at 0.8694, a break below could drag it till 0.8676.
Recommendation: Good to buy on dips around 0.8715 with stop loss of 0.8700, and target price of 0.8745.
